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In 5 states, richest Americans live in a “new Gilded Age” (cbsnews.com)
155 points by jb1991 on July 19, 2018 | hide | past | favorite | 195 comments



Even as the gap between the rich and everyone else widens, the quality of life for the bottom 99 percent has vastly changed since 1928.

This makes me wonder how much people care. In a global economy where the 1% are investing in markets that can reach billions of people, extreme poverty on a global scale was sliced in half in a 30 year period, and supply chains allow us to have super computers and unlimited entertainment for tiny fractions of the median wage, you can expect a lot of inequality, but life is way better for everyone in the world since 1928.

Inequality is only a problem in so much that it leads to higher crime rates and (eventually) civil instability in places where its most apparent. We haven't seen much of that (yet), but don't stop looking for it.


Inequality has other negative implications although they are far more indirect - misallocation of resources. To reduce to the absurd logical extreme while one technically might get the best students in the world by tutoring a handful of megawealthy kids with the budget of the entire US school system exposing all children would pay off far more just by giving them opportunity to advance more alone.

In addition that level of concentration has the power to corrupt systems to serve self-perpetuation of the interests of the wealth holder at the cost of everyone else. Horrifying third world corruption like lobbying against a reliable power grid because it would hurt the diesel and generator seller's profits despite it killing people and holding the country back.

Technically a robust system of law and justice could keep those controlled but money comes with myraid ways to undermine that. These are extreme examples but they demonstrate why it should be watched carefully.


I think the really important point you make is the issue with corruption. If someone simply provides value and gets rewarded for it, that is great and they deserve the wealth; but it is the sad reality that most people with lots of money/power eventually seem to seek more power through any available means, which eventually becomes through by force of law and corrupting governments. The thirst for power and the hubris of seeing yourself as a kingmaker is a powerful temptation for a lot of people.

I don't believe in forced redistribution or any of that (that usually just ends up making the problem worse). I think actually having a just system of laws which are enforced fairly and a culture that promotes virtue are the best guards against corruption.


Just for a point of clarification can you site a case where forced redistribution made the problem worse?


The Cultural Revolution and the rise of Soviet Russia resulted in widespread famine leading to the deaths of tens of millions of people in each country.

It turns out that just handing the reins of power to an untrained and inexpert proletariat is not a good strategy.


In the Chinese case, it was less the Cultural Revolution, and more the Great Leap Forward, but yeah, turns out if you require everyone to produce unrealistic amounts of steel, they turn their plows and woks into steel, and then they can't produce food, and can't cook, and they starve.


The Great Leap forward was an example of so many things going wrong including the danger of refusing to admit being wrong and lack of domain knowledge.

The famine also has roots in the pest eradication campaign lists including sparrows because they also ate grain. However they also ate locusts which makes the "sparrow tax" well worth paying compared to plagues of locusts scouring your fields. At least until you can control them sufficiently through pesticides or other measures anyway.

They refused to consult actual farmers or industrialists and then when faced with evidence of problems turned foolishness into evil by refusing to modify their policies. Just not consulting isn't a sin in itself - at times disregarding prevailing wisdom can pay off contextually or generally - if you know what you are doing or modify in the face of failures to address not knowing before rollout.

Those sorts of problems were endemic to communism along with refusing to recognize that while often overcompensated and not immune to foibles they do in fact do useful work. It is interesting to contrast with actual collectives of say farmers or occasionally artists - not leading the world by any means but a stable niche and a beneficial arrangement.


True, and it was more a failed experiment in central planning than a massacre of the landowners.


The problem was forced distribution and how that is a bad idea. You've redefined it as "forced distribution by an untrained and inexpert proletariat and how it is not a good idea".


Redistribution is always from the rich to the proletariat. “To” not “by”. I’ve pointed out that the proletariat is, on average, less expert and trained. You may disagree with this point, but I haven’t redefined anything.

Instead, I’ve attempted to point out some ramifications of extreme equality.

This is very different than having a strong social safety net..,


> Redistribution is always from the rich to the proletariat.

No, it's not. Redistribution in the other direction is possible, and redistribution where the parties are not “the rich” and “the proletariat” are possible.


Agreed, my original question was not trying to conflate "poor people-proletariat" with "untrained and inexpert", I think that is a dangerous path of categorization.


You asked for times when forced redistribution of wealth caused problems. I complied. In the Russian case a major problem was that the means of production (farms and farm machinery) were taken from those who knew how to use and manage them (the landowners) and given to those who didn’t.

This was an extreme example (landowners were massacred). More minor forms of wealth redistribution might be more viable.

The bottom percentiles are substantially less trained an less educated than the upper percentiles. This is not a “dangerous conflation”. It is a fact. Education is strongly correlated with wealth. The bottom 50% are less likely to be educated either in college OR in a skilled vocation. You wouldn’t just put the janitor in the ceo role. Likewise, you wouldn’t target innovation and technical advance by cutting taxes to the the poorest citizens. You might cut taxes for other reasons (e.g., humanitarian)...

And of course, increasing educational opportunities to the poor might help w innovation, but free education is not identical w wealth redistribution.


If you want to understand wage stagnation in the US, look up the "elephant curve." In a nutshell: middle income of rich countries has stagnated because of the new need to compete with rapidly industrializing poor countries. Everyone's income around the globe tends to increase during this process (a very good thing!), except for middle wage earners in rich countries.

Meanwhile, in local politics, both sides of the aisle blame eachother for this effect, which is totally outside of either of their control.


Cutting taxes and then cutting government services is totally within their control. Providing assistance to big corporations while denying it to citizens is also under their control.

Saying both sides do it when clearly only one side is doing it does not help.


You say assistance is being denied, but look at the graph of transfer payments by the government, it has been growing fast since the early 70s, and up every year since 1950 except during the financial crisis in 2008/9.

You’d almost think that the increased social spending could be contributing to the increased inequality because it tracks closely.

https://fred.stlouisfed.org/series/B087RC1Q027SBEA


Perhaps more people are qualifying for government assistance, because they're making less money.


Exactly, it's the government subsidizing the labor costs for huge, profitable, companies not paying their workers living wages. [0]

[0] https://www.forbes.com/sites/clareoconnor/2014/04/15/report-...


That graph doesn’t look like it accounts for either inflation or population growth, and so it’s not going to say anything useful. It’s certainly not suitable for making your argument.


Here it is divided by CPI and population: https://fred.stlouisfed.org/graph/?g=kyKl


This isn't really a good argument for the parent IMHO, which deals specifically with middle income workers.

Unfortunately I can't find an exact chart with details on the % of transfer payments devoted to each category, but my best guess is that "middle income workers" are not the biggest target for a large portion of this category. It's pretty clear in various budget charts though that the largest category of "transfer payments" in the United States go to the retired (Medicare and Social Security) and health assistance for the poor (Medicaid). Some of the other big hitters also are more low income oriented (eg SNAP).

There are some programs like unemployment insurance which may help middle income workers, but they only temporarily under a very specific circumstance. Even something like EITC (I'm not sure if it counts as a transfer payment or not in that graph, but it should) tapers off well below middle income if you don't have children.

(There's not necessarily anything wrong with biasing transfer payments to the poor and elderly at all, I'm just saying that if transfer payments have increased a lot, chances are it wasn't caused by any middle income worker except maybe retired ones.)


I find the elephant curve explanation compelling. But I’m not sure it’s fair to then say there’s nothing that can be done to mitigate the impact of that.

Rich Scandinavian countries, for example, have a more redistributive tax system that appears to leave people broadly happier. Fine to argue the relative merits of such an intervention, of course, but worth noting it’s very much an option.


Not really an option. The largest scandanavian country, sweden, is a little larger than Los Angeles and the rest are much smaller. They have little emigration and immigration, and although their gdp per capita is similar, the huge population difference means their economies/gdp are of a totally different scale.

Apples to oranges.


There is more emigration and immigration in Sweden than in the US (relative to the population).

I don't see why scale would matter that much. If it works for 12 millions why wouldn't it work for 2times more, or 10 times more ? Or 30 times more ?

It would require some real argument about why size matters and prevents the policy from working. Because right now the US has an economic repartition similar to Israel, which is even smaller than Sweden.


Anecdata: I work within a large Scandinavian bank. I've met a lot of people (maybe 20?) from our Copenhagen office, but I've yet to met a single Dane among them. It's a mix of Eastern Europeans, Western Europeans, Southern Europeans, other Scandinavians Indians, Chinese, UK, US etc.


Your rationale for the Nordic model being inapplicable to the US is a common one among conservatives, but it baffles me.

Of course the Nordics are smaller than the US, but all of the economic variables in question should scale on a per-capita basis. Specifically, what is it about a population difference that makes a strong safety net inapplicable?


"America is bigger than X" is a thought terminating cliche to make people stop asking awkward questions like "why is quality of life better in X?"

Except it's baloney, the EU even has a bigger population than the US and has universal healthcare, public transit, etc.


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That is unnecessarily divisive. Northern European countries trust each other more. They might have an ethnic and cultural history that enables trust while The US doesn't. No one can deny the influences and overlaps of public policy, culture, and economics on each other, but no individual aspect of society justifies inaction. That is more of a red herring than anything.


Ah yes, it couldn't possibly be that some people have a (justified or not) ideological opposition to something, or that they believe there are real concrete things that would prevent something working for a country of 9 million also working for a country of 326 million. No, it's definitely that they hate brown people.

I expect better from HN, honestly.


What I expect from HN is recognition of facts. Denying the role racism plays in any discussion about welfare is intellectually dishonest.


Can you explain why that would make a difference in the effectiveness of the policies?


These Scandinavian countries may be unable to afford this approach if they were required to provide for their own national defense at entirely their own expense.

In doing so, many countries with these sorts of nation wide programs may become woefully uncompetitive, not to mention quality of services would go down.


Do you have sources supporting this argument?


This is exactly right and something that my fellow American Millennials can't seem to grasp. I do business in many different developing countries where a good wage even for skilled programmers is less than 10% of a normal silicon valley wage.

It really is the whole world competing for information jobs these days and while it will eventually level out, it's bound to cause wage depression in already developed countries.


> Even as the gap between the rich and everyone else widens, the quality of life for the bottom 99 percent has vastly changed since 1928. >> This makes me wonder how much people care.

People do care, because their year of comparison isn't 1928, because most weren't alive at that time. Rather they compare it with the long post-WWII period of growth that they or their parents grew up in, when basic goods and services like housing, education, and health care became affordable for the working class.

People don't feel grateful that polio isn't prevalent today because they don't see anyone with it anymore - it's baked (justifiably, IMO) into the expectations-cake in the developed world. However, they do see that it's harder to afford the basics, and also some of the luxuries of life (i.e. the boat and cabin by the lake).

Cheaply available entertainment and computing power is cold comfort when you are struggling to pay your mortgage/rent, your out-of-pocket medical costs, or for your childrens' education.

EDIT: I would add that I also recognize that the post WWII social contract wasn't (and still isn't) available to large sections of the population.


To be honest, a nice gap between rich and poor is probably a good thing for the economy. If people aspire to become rich by producing value/wealth, that's a great thing for everyone.

The problem is when people become rich by not producing any value or hampering future value. You either become rich by producing more wealth than your peers, suppressing wealth of your peers or force acquiring from your peers.

The 0.1% start engaging in suppressing and the dictators start engage in force acquiring.

I believe a healthy tax system and a healthy income gradient makes up for a long term prosperous country.

The problem with US and more pronounced by Trump administration is the big tax benefits to the 0.1%-ers, pulling out ACA, net neutrality e.t.c is going into the "suppressing your peers" area.

America may have a strong economy now, but its not sustainable for long term.


I would also suggest that inequality is also a problem in that it can distort the political process - this seems to be a particular problem in the US although we are hardly immune from it here in the UK.


Many who argue this point are usually the ones who would be doing the distortion when the time comes -- for example, when Yanis Varoufakis argues that there needs to be more income redistribution across Europe or else the pitchforks and torcehs are coming, I wonder what the difference is between predicting instablity and vaguely threatening political violence.


My understanding is that Varoufakis is a pretty decent guy who tried to do the right thing but was hammered into the ground because he refused to play political games.

Edit: If nothing else I thank him for pointing out the irony of German politicians insisting that a "debt is a debt" to Greeks...


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This site isn't for political or ideological battle, because that's repetitive and we don't learn anything. We've asked you to improve this in your commenting twice already, but we'll ask again.

https://news.ycombinator.com/newsguidelines.html


I really don't understand how this was a political ideological comment when it is commenting on a fact in the context of the current discussion. Could you please explain why my comment was deemed inappropriate? I have yet to receive any feedback when asking the mods, which is probably why it continues. Is it because my opinions are "wrong" or is there an actual reason behind any of the "asking to improve"?


Well, we don't want users to have no feedback! Could you please email hn@ycombinator.com?


Will do, I was trying to give you the opportunity to defend your position before submitting a complaint about your behavior. I will note your lack of initial explanation and refusal for explanation when prompted.


She called for the shaming of prominent members of the executive branch.

Also, I guess you mean high youth unemployment.


I think tech workers are vastly out of touch with how the majority of Americans are living in this country, but- it is only a suspicion. Indeed, we are fortunate.


By and large, you are correct. I think it's just a human condition that if you make 10x what the poverty line is you are also 10x unable to sympathize or empathize with those making less.

It's very easy to feel like a rational human when you have everything you need and more. It's too easy to blame the poor for making bad decisions. They are operating under an entirely different logic system and reality is bent in ways the upper 20% cannot fathom unless they've been there.

It's especially galling when success in this country is increasingly tied to a birth lottery that the winners justify the system with such disregard to the unfortunate.


Having been someone who has definitely been there, I think you're right. I am far, far more comfortable than I ever could've imagined 10 years ago but I'm not under some delusion that I didn't get at least somewhat lucky.


Its actually correlated with much more than crime and civil instability. Its correlated with health, happiness, and a bunch of things that affect well being.


Is income inequality also correlated with a lower median income?

If so, then any correlation between income inequality and all of those other things are likely a correlation between them and median income.

Do places with with high income inequality and high median income compare favorably or unfavorably with places with high income inequality and low median income?


This is an overly simplistic interpretation of human beings. Our life satisfaction is partially dependent on our perceived social status, so increased inequality can indeed weaken quality of life.

Comparing quality of life today to quality of life in 1928 (or any other time) is not a simple exercise, there are a lot of variables to take into consideration.

Philosophy is really subject you need to study to understand this. On quality of life, economics is very superficial and unsophisticated (and honest economists have always admitted as much).

If you'd like to know more take a course in philosophy (or listen to the Philosophize This podcast)


> Inequality is only a problem in so much that it leads to higher crime rates and (eventually) civil instability in places where its most apparent.

This is astoundingly incorrect. Ask the people of Flint, MI. Income inequality directly impacts the length and quality of a person's life.

A quick glance at Wikipedia is all it takes to discover this. https://en.m.wikipedia.org/wiki/Economic_inequality


Or, stated similarly: “Inequality is only a problem for the wealthy in so much that it leads to higher crime rates and (eventually) civil instability in places where its most inconvenient for the wealthy.


Your conclusion sounds like the premise of Ready Player One (and countless other dystopian future scenarios). Hooking poor people up to cheap, advanced entertainment is no better than stuffing them which cheap over-processed calories.


So only rich people can afford to make good choices in regards to food? Rice, beans, whole grain bread, and frozen vegetables are all fairly cheap. It doesn't have to be Whole Foods Organic to be healthy.


I see this argument a lot on here, and while I agree with it logically and factually, it totally dismisses the human element.

Rice, beans, and vegetables are very nutritious and cheap but they're generally boring in comparison to a bag of Cheetos or a doughnut.

When you're dirt poor, you don't have many avenues to get a quick pick-me-up feeling -- so often that comes from junk food. A $1 burger is not as good for you as $1 of veg and rice, but it gives you more momentary pleasure and activates the reward centres in your brain.

Even as you eat it, you know you could be eating something more nutritious which would be better for you in the long-run, but you still eat it. Once you do it the first time, the subsequent times become easier, especially if it's loaded with sugar and you get yourself in a high/low blood sugar cycle.

I'm not defending it, and I'm not saying people have no control over themselves, but I just wish people would have a little more compassion and understanding when they go for the "beans and veg are cheap" argument.


That's pretty much spot on.

I remember being $100 short in my checking account for the next months rent and having $5 in my wallet. Humans are not machines. I bought some fried rice and a 40oz beer and watched my favorite show. For a few hours I was not completely miserable.

People who have more than enough do not understand what those few hours mean.


There is also the time element. If you're working two part-time jobs and delivering Seamless on the side, not to mention your hour-long commute from the nearest affordable community, your time to prepare all those healthy vegetables into a palatable meal is a lot less than that of the average tech worker.



People like to lambaste the McDonald's dollar menu cheeseburger, but it's a remarkably cost-effective and more-healthy-than-you'd-think method of sustenance. Skip the empty calories in the french fries and soda, and you're really not doing that badly.


Inequality is a pretty big problem when you're one of the majority stuck on the bad side of it. Most people here seem to exhibit a deeply held ignorance on the plight of the vast majority of their fellow citizenry.


The top 1% of earners pay more than 40% of the total federal taxes. Moreover: "the top 1 per cent paid more tax than the total paid by the bottom 90 per cent combined."[1]

Those taxes fund defense, social security, national parks, interstate highways and many other services that benefit everyone.

[1] https://www.ft.com/content/d17e9240-c61e-11e7-b2bb-322b2cb39...


A couple of qualifiers:

A) This only refers to income tax, and does not count more regressive federal taxes (FICA) or state taxes (sales tax). It's interesting that I can easily find sites with aggregate tax distribution by income level for income tax pretty easily (https://taxfoundation.org/summary-latest-federal-income-tax-...), but finding sites with aggregate tax distribution by income level for FICA seems difficult...

B) It's worth keeping in mind that the top 3.65% do earn 17.5% of aggregate income (https://en.wikipedia.org/wiki/Household_income_in_the_United...)

Obviously the United States is progressive taxation overall, but I feel that this oft-quoted bullet point way over-simplifies the American tax landscape.


I think it's important to remember that the top 1% can only claim credit for funding over 40% of the total federal taxes because they have managed to suppress the growth of wages for the bottom 99%. Since they have captured so much of the wealth, they have robbed the bottom 99% of the ability to sustain their own the country. This isn't a function of generosity or humanitarian sentiment and to imply otherwise would be, in my opinion, dishonest.

As we see the top 1% decide to pay less and less of the tax burden (a burden they have placed on themselves), we'll see more crime and unrest and roads rot and the social safety net touted in this article begins to disappear.


Try looking outside the US for the crime rates and civil instability. There were riots in the Haitian capital a couple of weeks ago as their government tried to raise the cost of fuel.[0]

While we talk about the "global economy" a lot here in the US, I believe that we only benefit because we have so much control over that global economy. As US control erodes it seems reasonable to assume that we'll start to be hit much harder and the top 1% will be well positioned to be insulated from that hit.

[0]: https://www.washingtonpost.com/world/the_americas/large-prot...


Inequality in itself causes unhappiness. Or jealousy, if you want to call it that.


"Serfdom in itself causes unhappiness. Or jealousy, if you want to call it that."

Interestingly, it seems to me that the current iteration of the oppression business can somehow always dismiss calls for justice as envy/jealousy, but never the previous ones.


I favour income distribution and the nordic model, and even calling it envy should not be a dismissal, but a recognition of a basic human emotion that should be socially engineered against.


I didn't assume you agreed with the envy part. I do however find it absurd that envy is used in this context - since the word would never even be thought about in the serfdom case. Words do carry meanings after all. In this case we have the mortal sin of the individual instead of the righteous condemnation of societal injustice.


I always used to mis-use Jealousy, when I meant Envy. you mean Envy. The lord God is a Jealous God. He's not envious.

That snark aside (sorry) I actually agree with you. relativism is all here, the mass inequality fuels dissent in unhelpful ways and the marginal freedoms of Moar Moar is actually low: if they paid more tax, the increment on society would be huge, and the decrement to their disposable income unimportant.

Envy!


> I always used to mis-use Jealousy, when I meant Envy. you mean Envy. The lord God is a Jealous God. He's not envious.

Wait, my dictionary (the Apple dictionary) defines "jealousy, adj. 1. Feeling or showing envy of someone or their achievements and advantages." What's the difference?


The difference is exclusivity or deservedness (with jealousy being a superset of envy).

A combination of exclusivity and deservedness could be jealousy regarding a "cheating" partner in a monogamous relationship. To describe that as merely envy would be confusing, at best.


The misuse of "jealousy" in place of "envy" bothers me as well, but I'm not sure it was misused in this case.

I would assume that if income inequality inspires envy in those on the lower end of the economic scale, it would also inspire jealousy at the upper end.


Hmmm... you know? you may be right. I tend to read use of Jealous to mean "I want what you have" but in this context it could be the super rich saying "you can't have what I have" which is .. Jealously guarding their riches.


> Hmmm... you know? you may be right.

I'm sure this has happened once before, though the instance doesn't spring to mind right now.

Does it also bother you as much as it does me when people misuse "fewer" and "less"? "Fewer" should be for discrete concepts ("fewer than twelve items"), while "less" is for measured continuously ("less water in this cup").

> I tend to read use of Jealous to mean "I want what you have" but in this context it could be the super rich saying "you can't have what I have" which is .. Jealously guarding their riches.

I tend to think of jealousy and envy as two sides of the same coin - one tends to inspire the other.

If someone doesn't suspect others of envying what they have, they have no reason for jealousy - why guard that which is not sought? Recognizing envy in another for things you posses is often (usually?) the origin of jealousy.

On the other hand, when someone recognizes jealousy in another, it often directly inspires envy. How often do people pursue things that they never desired until they saw that others valued them?

What is advertising if not an attempt to inspire envy in your audience?

We even have a term for markets where this cycle feeds upon itself - "Veblen goods". The more they cost, the fewer can afford them and the more that desire them.


I think many people feel something is wrong with society, but don't necessarily know where to pin the blame. The Brexit vote here in the UK, and Trump's campaign in the US, successfully played to these feelings (but pinned the blame on immigrants, the EU, the Democrats, liberal elites, etc.)


I find it quite scary how easily people are influence/manipulated, especially in the age of the internet. It has never been easier to make sensationalist, misleading headlines without anything to back them up. Many people will only read the headline. The human mind is so easily manipulated and over time, makes up information and remembers it as fact (see confabulation-https://youarenotsosmart.com/2012/05/30/yanss-podcast-episod...). Who knows how much Brexit, Trump, etc are due to such manipulation?


> but life is way better for everyone in the world since 1928.

I agree with most of your comment, but everyone?

For sure, the mean and median purchasing power of people is way up, but the floor of human experience is as low as ever. Being poor today in North Korea, Iraq, or Syria is surely as miserable as human life has ever been.

> Inequality is only a problem in so much that it leads to higher crime rates and (eventually) civil instability in places where its most apparent. We haven't seen much of that (yet), but don't stop looking for it.

Our crime rates in the US are higher than most places in the world. For example, more than half the countries in the world have lower homicide rates than the US. I agree with your hypothesis that crime is linked with inequality and I think we are already seeing that.


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But if we doubled the absolute income of the bottom 90%, that’s good regardless of what happens to Bezos yes?


Ayn Rand is both a well respected and an intelligent (albeit certainly controversial) writer. Instead of simply trash talking his arguement on the basis that she supported it, why dont you make substantiative points against what he said?


If you cut out the Ayn Rand qualifier from that statement, you're left with "just blatant horseshit". While that is an emotional statement, the core of the absurdity is already revealed in the preceding paragraph. In essence he's already made a substantive argument, is your complaint that you're not following? You find the situation described normal? Perhaps you are not convinced that is what was originally described, and instead it needs to be read with more nuance?


Substantive argument? Care to point that out? Because to me it looks like he is claiming that inequality is unimportant because the poor now have cell phones and color TVs. Which is... hardly compelling. It seems like an extraordinary claim backed by an empty argument. Hence bullshit. I also spend about as much effort refuting flat earth claims, that is to say almost none.


Respected by who, the Heritage Foundation? Why don't you make a pro-inequality argument? That seems to be the bold claim that requires evidence.


History rhymes.

Of course, this time the robber barons know what will happen if they delve too greedily and too deep. Unions, the New Deal... can't have that. This time they are making more clever investments in propaganda, government control, and distraction.


..and supported by the latest tech to make that all much easier :)


tech is just tech, used as a tool by both the forces of good and of evil


This is a BS cop out to avoid having to think about ethics.

Some tech is inherently good or bad. If you create platforms that spread misinformation and rage much more effectively than information and reason, you shouldn't be able to walk away saying "it's a neutral tool!"


> Some tech is inherently good or bad.

Not true. You might see a platform "spreading rage" as bad but to the people on the platform it's giving them a way to fight injustice (hence the rage -- what are they angry about).

Tech connects people. You may not agree with those people but they'll be glad to have the platform.


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It’s sad that we still have Godwin’s Law in 2018.


Not necessarily. If the owners of the tech and the robber barons are the same people, that is a concern.


I think rapnie means that tech can be used to keep more people oppressed with fewer people doing the oppressing making revolutions more difficult.


You should read "A Deepness in the Sky" by Vernor Vinge. It's sci-fi and contains lots of misuses of technologies. When I see something like what you wrote, it reminds me of this novel. Really, just read more sci-fi and you will get how technology can be used for real evil.


They've also gotten much better at hiding, laundering their money. The smart ones, at least.

I grew up around a lot of rich people. Old money knew how to blend in. New money (nouveau riche) stood out. Then, it was just gauche. Now, I think the dummies flaunting their wealth engenders a lot of resentment.


Not surprisingly, there's 5 places in California where the top 1% has more wealth than in 1928. Which means that the ratio of income of top 1% to income of bottom 99% is higher than it was in 1928. Which is a sign of rise in income inequality.

I would be really interested in studying the breakdown of wealth within the top 1% in all the places listed. In my experience (here in India at least), most people in the top 1% are just as worried [about income inequality] as the rest of us. It's the people at the top 20% of the 1% that can live anywhere, but sure, journalists can still call them the 1%.


I’ve always wondered, where did California’s wealth originally come from? Was it the gold rush that started it all?


The Gold Rush did indeed make a lot of people wealthy. Not the gold itself, but rather land speculation and the business bubble.

When I randomly recall old wealth families that I’m aware of, they pretty much all started from local business tycoons (newspapers, railroads, essential consumer products, etc.) that usually diversified through real estate. No different than the rest of the US.


and no different from a lot of the rest of the world


California is an amazing place in so many ways.

It is the gateway to asian trade, Mediterranean climate, resource rich, has great ports, chokepoints east that make scaling business like railroads easier, etc. It was also empty during modern times.


it was also empty during modern times

Except for all of the people who lived there. https://en.wikipedia.org/wiki/Indigenous_peoples_of_Californ...


100% with you on the "we can't just pretend like people weren't living here just because they weren't white" BUT, from your article:

"Prior to European contact, California Indians had 500 distinct sub-tribes or groups, each consisting of 50 to 500 individual members."

Assuming that all 500 tribes were 500 people, that's only 250,000 people. Relative to the geographic size of the state, that's a pretty low population density. And many of the the areas of large growth wouldn't have been useful to a pre-industrial civilization, since they required so much labor and technology to exist (like say, pumping in water from 4 neighboring states in order to meet the needs of the population).

Let's settle on "It had a relatively low population of Indigenous people to area" instead of "it was empty", and call it a day?


Even as a remote outpost from the world, the population of indigenous people in California was devastated by epidemics before substantial numbers of europeans arrived there. Smallpox alone probably wiped out all densely populated areas.

They certainly weren't treated well, and I make no excuses for that, but the place was essentially empty by the time California started hockey-sticking.


The initial burst of wealth began with the gold rush and was extended with the transcontinental railroad, but the basis for California’s modern wealth, all the way from San Diego to San Francisco, was the military industrial complex. Hollywood is a major industry in Southern California for sure, but Hollywood didn’t turn California into an economic juggernaut, the Pentagon did.

That same defense contract money and influx of tech talent is largely responsible for the foundations of Silicon Valley as we know it today.


Huge amount of very profitable agriculture is one source of wealth, for sure.


Now yes, but that took time/energy to create. California wine was a joke until the 70's, and it's dairy industry didn't catch up with Wisconsin until the early 90's (despite massive size differences in the two states).


Hollywood played a part in the pre-silicon valley days, although I don't know how much that contributed relative to agriculture/trade.


...It wasn't always wealthy. My family has been around Marin for generations, and my aunt bought a nice house in San Jose for like $14,000 years ago. What it's worth now that everyone wants it...yikes.


The initial pulse was gold, as you suggest. The state motto is “eureka”, referring to gold. Gold was discovered in 1848, statehood followed quickly in 1850.

Agriculture and railroads followed the gold.


The weather, natural resources, size, and topography are all along the most desirable for many, many people.


Escape patent enforcement from the east coast?


Just to give unspoken point of view, a scenario which i would like to pose: That Income inequality provides a kind of fiscal stability vs uncontrollable inflation.

If you overlay a chart of inflation on top of the chart of inequality you will find that maximum equality appears to correspond closely to periods of maximum inflation.

Governments from both sides of the argument have focused on reducing collective bargaining and on ensuring that efforts to rejuvenate economies, like quantitative easing via the financial sector and tax breaks are focused on the corporations and wealthy precisely because of the low impact this can have on inflation

The effect of these measures tends to pump money into the already wealthy while bulk of the population experience no-change.


Inflation isn't all bad.

The lack of inflation is making it easy to concentrate and safely hoard cash, which is cutting off the oxygen for everyone else. We've had 30 years of an ultra-safe, guaranteed strategy to make money -- move all value-added services to places with cheap labor and cheap money and export cash, facilitated by tithing a good portion of GDP to the OPEC producers. It's destroying western society.

The best thing that could happen to the west today would be a devaluation.


Yeah inflation can be good if you have debt.


That sounds like a side effect of the wealthy holding more passive assets and spending less of their income than an inherent virtue. Of course the real question is why inflation? Real wealth creation should cause inflation. There are far more goods available today and just subdividing the old currency won't cut it as a medium. "Was there earlier and held onto value doing nothing granting disproportionate gains" isn't a very good basis for resource allocation even if it personally works out well for some people. Or is the inflation from heavy spending devaluing the currency to try to pay everyone without any corresponding value? Inflation is just a symptom and may be beneficial, neutral, or pathological depending on context and cause.


Of course stability and inequality go together, that's how the system has always been. There's never been a culture that was both a world power and also egalitarian. In order to have the wealth inequality vanish, you change the value of things. It upsets the entire market and valuation of goods and society as a whole. Governments tend to focus on fixing things the way you're speaking because they're A- strong, already established governments and B- they have capitalists helping to make the decisions that stand to lose the most from a change in the marparadigm

You can't have a non-capitalist society and also care about inflation, since inflation is a product of capital/money.

Remember, most of Marxism is based on a central pillar of "The cause of all the world's evils is the inequitable distribution of goods across needs." People are less likely cares about money/inflation if all their needs are being met.


This article’s chronology is off a bit. It compares current income inequality to 1928. But 1928 was not part of the Gilded Age. 1870-1900 is usually the period known as the Gilded Age.

Aside from that anachronism, I used the exact same term to describe where we’re at just a few weeks ago.


Yes, and it's too bad because the irony of pointing out that the 20's were part of the so-called "Progressive Era" despite having robber barons and such horrible inequity is really too good IMO.



For those who just want the list (which is buried annoyingly deep):

* New York

* Florida

* Connecticut

* Nevada

* Wyoming


The Gilded Age refers to the last several decades of the 19th century, and yet the article compares today's data to 1928. That would be "the Roaring Twenties."


Misusing the term Gilded Age is becoming more prevalent recently within the inequality narrative. I'm guessing The Gilded Age was shown to produce more clicks and why let facts get in the way of clicks


Yeah bro Buzzfeed is totally doing AB tests on Article Headlines about Income Inequality.


They almost certainly are. Buzzfeed didn't become synonymous with clickbait by random chance. It literally spun out of a research lab studying the viral spread of online content.


Why don't you go find out how many articles they have written about inequality and tell me how the statistical power of their AB test looks. lol


We should have a billion dollar networth cap. If you pass it, it gets taxed extremely, like 95%.


This would simply be a return to the tax code of the 1950s. (Which I think would be a good thing, to be clear.)


The effective tax rate in the 1950's isn't that much different than it is now.[1] The tax code back then had some very generous deductions, so people rarely paid the 90% marginal rates.

[1]https://taxfoundation.org/taxes-rich-1950-not-high/


Why? You sincerely think the world would be any better off if governments managed hundreds of billions more?


No you're right, I blindly trust Jeff Bezos to do the best thing for humanity.


What has he done wrong in your opinion?

I think my point is that if lots of money is being made, someone is going to have to spend it. You may disagree with how it is spent by Bezos, etc. but I can’t imagine capping net worth so that governments can spend more is the right solution.


In theory, I vote for how my government spends the money it obtains. Bezos isn't accountable for his personal wealth to be spent in the public good (or what I perceive to be the public good). If you assume the government is able to act in good faith on the public interest, then it makes more sense for them to have the money than a single individual only accountable to an extremely small minority of the population as a whole (his board/company)

The idea behind any socialist theory is that "the state" should be acting on the will of "The People" and therefor is better serving them. If it's democratic socialism, you're also able to help put players into "the state" that desire to act on the will of "the People" and remove players who don't. This is all in theory of course. The same way that, in theory, capitalists use their capital to create jobs that require labor which passes wealth to the laboring class. The reality is infinitely more complex.


If we had a UBI maybe it’d be a better idea!


He doesn't have to be doing anything wrong: We can be wrong for letting him accumulate so much wealth and influence.


The point is that democracy is good in that it holds power accountable to the will of people. Giant accumulations of wealth come with power but no accountability. A billion dollars already puts you deep in the new aristocracy, anything beyond that is plainly obscene and should be returned to the will of the people.


You just have to take it to its extreme conclusion. A future with a handful of trillionaires and billions of destitute people entertained by electronics that cost pennies. Is this really the world you want for your kids or grandkids? If we continue to allow the concentration of wealth this is not only a possible reality but a likely one.


Still better than blindly trusting Uncle Sam to do the best thing for humanity. At least Bezos doesn't have a track record of genocide.


Why you think giving what is basically unlimited power to an individual instead of a governing body that at least on paper is accountable to its citizens boggles the mind. Celebrity/Wealth worship has truly gotten out of hand.


That's his point. Bezos doesn't have unlimited power. The government does. Bezos can't go off and just start a war. Bezos can't throw you in prison and keep you there. Bezos can't take a chunk of your paycheck involuntarily.

I think plenty of people would rather see the guy that has a good online store get the money vs. the people dropping bombs on various countries and imprisoning large swaths of our population.


It's easy to fix income inequality in theory, but every policy creates incentives, and the incentive here is to have people making tons of money move their assets and businesses out of the country.


This in conjunction with:

* if a business (or business conglomerate, no sneaking around this) is bigger than N billion, the state gets N% of the shares, with the percentage progressively bigger up to something like say 25%.

At some point a company gets so big that it influences a country by its sheer size. In a democracy it's only fair that the state gets a say into what that company does.

I think it would be fair that the state gets limited voting rights to prevent abuse. I'd say that it should get a vote regarding profit decisions. But probably no say in product decisions, for example.


So Bezos has $150B in Amazon stock. You want him to give the gov't $149B of that? Am I hearing you correct?


$142.5B


Absolutely. Remember: technology will make everything move to fewer and fewer sources. If you wanted a book 20 years ago, you went to your local bookstore; now you go to one company.

And so the people that get to this place first put their flag on it and claim it as their own. (https://www.youtube.com/watch?v=UTduy7Qkvk8) I'm glad Jeff was there first (essentially) but we can still decide the future we want.


Ugh, this again. Net worth != income.

I get the spirit of what you're saying but you can't tax net worth, you tax income.


> you can't tax net worth

Sure you can, although not all at once. Both property and capital gains taxes are examples of this.

Basically, the only way off the top of my head to hold capital and not have it taxed is to leave it at rest - either in something like precious metals (which is a very poor choice as a vehicle for growth) or long-term investment (which makes it available for use by others).

Also, there's inflation. Inflation obviously devalues liquid capital, but it also impacts debts. If someone loans money at 1% APR, but inflation is 2.5%, then 1.5% of the value of the outstanding debt is being transferred from lender to the debtor each year.


You can absolutely tax net worth. It's not difficult at all.

You can add/increase property taxes. You can tax wealth above a certain amount. You can add/increase taxes on stock market speculation and holdings, and other financial instruments.

Whether you'd want to is a different matter, but saying you can't do it is factually incorrect.


right. The story told is that the money in the market (stocks, shares of companies, holdings, real estate, etc) is playing a part in creating wealth for everyone, and therefor better served by being left where it is.

there's 0 reason you can't say "this person is reporting holding, assets and liquid wealth of 2 billion dollars, so he owes X% back to the state." The issue is that typically the wealthy have the most influence over tax code, and they use net worth as a way to keep their money out of play.

But, like, you know, Amazon being worth so much money is really helpful to everyone because...reasons.


That is explicitly the point. Taxing income is stupid; the richest people don't necessarily have incomes at all. To the extent that inequality is problematic, it's from inequality of wealth.

In the U.S. you "can't" tax wealth without a Constitutional amendment, maybe you were getting at that.

If we could administer a low wealth tax of ~3-5% or something, productive people like Bezos would continue to amass wealth, but you wouldn't have unproductive rentier family dynasties as over time their wealth would be taxed away.

edit: I should add that Saudi and Oman already effectively tax wealth, since they have no income tax and Sharia requires donating a percentage of your net wealth to the community.


Why not a million dollar cap? Surely that would be more effective.


We already have a progressive tax system where higher income levels are taxed at a higher rate. The question is where to ratchet up those rates and by how much. In order to do that reasonably, we need to understand what the marginal utility [0] of money is for our society as a whole.

Put simply, anyone could spend $100k a year, most people could find useful things to spend $1M or $10M on annually. But the higher you go, the harder it is to find meaningful things to spend money on. Each extra dollar is simply worth less than the last (and a lot less than the first!)

So while a 90% rate on income above $3M[1] might seem insane today, it would not even be a historic high in the United States. Whether it is fair or moral to tax in such a way is another question, but practically speaking high taxes affect rich people less the richer they are, and we as a society have historically been willing to take more from them because of that.

[0] https://en.wikipedia.org/wiki/Marginal_utility

[1] https://en.wikipedia.org/wiki/Income_tax_in_the_United_State...


Be prepared to see your top tax contributors move to another country.


Let them go, we don't need them. Even though I don't really believe in the parent comment, I do not believe that we should ever be afraid of anyone leaving if we make decisions that they don't like.

This way of thinking is the premise of many abusive relationships. If someone wants to leave, let them. Appeasement never helps.


> This way of thinking is the premise of many abusive relationships.

Or the flipside of the metaphor, powerful governments "doing something that would make them leave" is making the decision to be an abuser.

The parent comment is suggesting perhaps abusing capital/entrepreneurs is a bad idea.


Yes, it is almost an opposite form of abuse and definately worth consideration. I do not think abuse is a good idea in any form.

Another form of abuse is exploitation which is closer IMO to our current economic situation. Less powerful earners do not usually have an opportunity to negotiate terms, they are take-it-or-leave it options which is not necessarily the case with more powerful earners. I routinely negotiate contracts to get the best possible terms for everyone, I wish I had that option earlier in life.

This is earily similar to Terms of Use and other agreements between consumers and large tech companies. I wonder when this trend started.


If we don't need them, why increase taxes on them in the first place?

I'm talking about people who, out of all people, have the means to easily move to another country. Your suggestion is akin to telling them, "I will give you millions of dollars to move to another country." Instead of addressing my central point, you're trying to flip it into some abusive relationship metaphor.


That was not me posting the suggestion of hyper-taxation. I am merely commenting on being aware of the decisions which are being made and for what reasons. If we make decisions based on fear, we are probably not making the right choice.

After re-reading your comment, you actually didn't use that argument like I normally hear it. You said "be prepared" and did not add on some vague warning like "then what would happen." Stating it the way you did, I hesitantly agree.

To clarify my point while trying to sound less preachy and without the sensationalist metaphor (sorry about that by the way):

If there was some new law or tax code being proposed which would have the effect of people choosing to leave (not being forced), then that should be one valid point of discussion.

That discussion point should be discussed, hopefully quantified and chosen based on pros, cons and rational discussion, but never on fear.


> Let them go, we don't need them.

People get to the top and stay there by being good at something. The fact that they're rich by definition means that their company is doing something that people find valuable and doing it better than the alternatives. Economic activity is not driven by the government; destroying the private sector is a recipe for instability.

> if we make decisions

Ah, "we". This must be the way to go because "we" made the decision together, right? "We" are right and "they" are wrong. No. Stop trying to weasel together some illusion of unity. The vast majority of Americans want no part in your delusions.

> If someone wants to leave, let them.

Sure, but why would you intentionally give them more reasons to leave? Speaking of "abusive relationships"...


> Ah, "we". This must be the way to go because "we" made the decision together, right?

Yes, through democracy. Sure we can disagree with our government as well as with our governments structure, but the fact is that "we" make decisions. In short, "we" are in this together.

> People get to the top and stay there by being good at something. The fact that they're rich by definition means that their company is doing something that people find valuable and doing it better than the alternatives.

I agree, but I would argue that there is no person or company which would totally and permanently cripple the US economy by leaving. There are some examples which would cause a very difficult adjustment period, but we would overcome.

> Economic activity is not driven by the government

No, the government does not drive the economy but in the best scenario can act as a reliable GPS guidance system or in the worst an annoying backseat driver. The trick is to walk a thin line between the two.

> destroying the private sector is a recipe for instability.

Probably, but who wants to destroy the private sector?

> Sure, but why would you intentionally give them more reasons to leave?

I actually don't agree with the parent comment and would never suggest creating laws just to make people leave...there's enough of that going on now. I just think that _fear_ of someone leaving is unhealthy at best.


As someone living in one of those top places, I think the usual consensus is that cities like New York and San Francisco and Washington DC are the most expensive cities to live in yet I live in a relatively conservative state tax-wise and people out here are still getting killed by the house prices. Rent has doubled in almost 3 years as well as many low-income families being pushed out of areas that used to formally inhabit.


The pairing of places associated with business and leisure should come as no surprise. The super wealthy do their business in and primarily live in the former while maintaining vacation properties in the latter. Then when they just want to coast on the returns they primarily live in the latter and charter a flight or spend a few days a week in the former as needed to for business.


I'm pretty sure the map at the bottom is wrong, at least in CA. The 5 CA metros listed are San Jose, San Francisco, Napa, LA, Santa Barbara, but the map shows 4 Southern CA dots (including one that looks like it's in the southern Central Valley of all places)


I was shocked when in an interview yesterday David Rubenstein, The Carlyle Group co-founder and co-executive chairman of the private equity firm that owns 275 companies, mentioned that he worries about 3 things:

1) National deficit and servicing entitlements 2) Tariffs 3) Income inequality and possible social disruption

1 and 2 were not a surprise, but to me 3 was.

Here is the full interview.

https://www.cnbc.com/video/2018/07/18/carlyle-group-rubenste...


Money is power, and some people are much better at getting their hands on money/power than others. Regardless of whether such money/power is "deserved" (which can be argued endlessly either way), we as a society really have to question whether we want a society where the overwhelming majority of people are screwed, and a tiny minority gets to own everything/everyone, call the shots, make the laws, and order the rest of us around.

We and our children are going to be shining these people's shoes for generations to come. Is that the future we want?


interesting that Seattle isn't anywhere to be found. I've always "felt" that the PNW had less old money. Anyone wanna feed my confirmation bias some more?


Eh, I'm not sure I would read into this as "Seattle is super egalitarian". Microsoft has made a lot of people (relatively) extremely wealthy, as has Amazon.

Seattle's probably catching up quickly to some of the cities on this list. Washington is just a much younger state.


Not really what im getting at. The pnw was developed later so I'd expect it to have less old money -- look at Oregon. The tech industry has certainly done a lot for the upper middle class in Seattle but the article is talking about people making 400k+ a year..


This article doesn't discuss the elephant in the room. If there's this discrepancy in the 1% between states, and that's seen as a problem, presumably some correlation can be found where the bottom N% are less fortunate in say West Virginia than New York.

Is there any indication that that's the case?


What's the elephant in that metaphor? That the rich make the poor better off by proximity?

If so, I think you're missing the point. It's not a particularly good thing to have lots of people in "tolerable poverty" rather than total squalor. The slight reduction in suffering isn't enough.

The real elephant in the room is the long term result of massive inequality. Social unrest, violence, revolution. History is littered with these outcomes, and many of those examples end with public executions.


No, the elephant in the room is what supposed issues income inequality creates. Surely if there's such a discrepancy in this number between different states that's going to be measurable in some way.

My biases align with the sentiments of the article. I think that income inequality is bad, but that doesn't make me immune to recognizing lazy journalism.

The article does nothing to question that assumption. If an increase in income inequality makes the difference between "tolerable poverty" and "total squalor", isn't there going to be more of the latter in New York than West Virgina?

The map in this article is almost the exact opposite of the one in the article, showing an inverse correlation between income inequality and the poverty rate: https://en.wikipedia.org/wiki/List_of_U.S._states_and_territ...

So what exactly are the negative effects? I'm sure there's some, but the article isn't helping us talk about those.


> The real elephant in the room is the long term result of massive inequality.

Is all that violence really the result of inequality? Or is it the result of poverty? If the absolute poorest people lived in middle-class comfort I can't see them plotting a revolution, no matter how large a boat their neighbour owned.


Wyoming is the surprise entry here.


Why would Wyoming be a surprise?

Serious question.

Out here in Wisconsin we think of Wyoming as a state with a lot of wealthy landowners. But that's based mostly on seeing huge farms, (ranches), that aren't actually farmed. (When you see a huge farm that's not being farmed in Wisconsin, you just KNOW the guy's richer than Crassus.)


Well, perhaps an embarrassing answer, but that area of the country is kind of an undifferentiated mass to me and I had no idea that Wyoming was richer than its neighbors. I live in New England.


To be fair, the opportunity cost of not farming land in the Mississippi river valley is a lot higher than not farming land in the rain-shadow of the Rockies.

Not farming some of the most fertile land in the world makes you richer than Crassus. Not ranching on land that can barely grow enough to support a smallish herd just makes you sensitive to the wholesale prices for grazing animals.


It depends on how much land, doesn't it?

A quick search shows that the largest ranch in Wyoming is Q Creek Ranch, at 560,000 acres. That's 1/60th size of the entire state of Mississippi.

Even if the land yields 1/10th as much as the rich farmland of Mississippi delta, if it's 1/10th the price and holdings are 10x larger, then the same value is being left on the table.


...discounting the scaling operational costs due to vastly increased distances to everything.

If you operate a small dairy farm in Wisconsin, with pastures near the barn, and a more remote hayfield that is mechanically harvested, you can definitely raise 20 cows with 40 acres, including plenty of margin for error. You would only have to reduce herd size in a region-wide, multi-year drought. The rest of the time, you're selling hay to your more-risk-tolerant neighbors. That's 200 short tons of milk per year, or 50000 gallons, with likely revenue between $150k and $200k, or $3750-$5000/acre-year, discounting the excess hay, culled beef, and veal calves.

If you're just sitting on the land, not even growing hay, you're leaving heaping piles of money on the table.

If your land has 1/10 the yield, you now need 20 acres per animal instead of 2. You can't put up just one, convenient dairy barn, so you're just growing meat. If you can get 200 pounds of beef per acre, that's maybe $1500/acre-year. That's significant, but not as significant.

The actual ratio is likely much worse than 1:10. With normal rain, a Wisconsin herd could potentially allocate 0.5 to 1 acre per cow. Out west, without irrigation, it can be 35 acres per cow, or more. So if the Q Creek Ranch could raise a herd of 16000 on 560000 acres, a Wisconsin farmer might be able to do the same with 1.5% the land area in a wet year. That's a lot less distance for the cows to walk, especially if the hay is trucked in from remote fields.

As it happens, Q Creek grazes from 6000 to 10000 cattle in any given year, and they also maintain a herd (of unspecified size) of elk, deer, and antelope for hunting. I'll estimate 2500 head of them, and call it 45 acres/animal.

Rosendale Dairy, the largest in Wisconsin, keeps 8400 cows, with 2800 acres for hay. 1/3 acre/cow.


If you look at the numbers, it's really not. I know a lot of people don't give a hoot about Wyoming, but if you consider:

1 - Its one of the least populated states, with a mere 580,000 people living there, but ranked in the top 5 in GDP per capita

2 - Mining fueled more than $11 billion in GDP in 2011, with the manufacturing, real-estate, and transportation industries also contributing strongly to its economy.

3 - Coal mining has been a boon for the state: According to the Energy Information Administration, Wyoming boasted nine of the 10 top-producing coal mines in the U.S. last year, with two mines alone making up 20% of total American coal production

4 - Peabody Energy (NYSE:BTU), the biggest public coal-producer in the world, operates Wyoming's largest coal mine, the North Antelope Rochelle mine. That mine produced more than 105 million short tons of coal in 2010 alone for Peabody. The company also operates the 10-largest coal mine in America: its Rawhide mine, also in Wyoming, with 2010 production of more than 11 million short tons of coal.

5 - Crude oil: Wyoming produced 53,400,000 barrels (8,490,000 m3) of crude oil in 2007. The state ranked fifth nationwide in oil production in 2007.[65] Petroleum is most often used as a motor fuel, but it is also utilized in the manufacture of plastics, paints, and synthetic rubber.

6 - Trona: Wyoming possesses the world's largest known reserve of trona,[67] a mineral used for manufacturing glass, paper, soaps, baking soda, water softeners, and pharmaceuticals. In 2008, Wyoming produced 46 million short tons (41.7 million metric tons) of trona, 25% of the world's production.[67]

7 - Wind power: Because of Wyoming's geography and high-altitude, the potential for wind power in Wyoming is one of the highest of any state in the US. The Chokecherry and Sierra Madre Wind Energy Project is the largest commercial wind generation facility under development in North America.[68] Carbon County is home to the largest proposed wind farm in the US. However, construction plans have been halted because of proposed new taxes on wind power energy production.[69]

8 - Uranium: Although uranium mining in Wyoming is much less active than it was in previous decades, recent increases in the price of uranium have generated new interest in uranium prospecting and mining.

https://en.wikipedia.org/wiki/Wyoming


It's covered nearly immediately in the article - it's due to ski resorts such as Jackson Hole, which are havens for the ultra-wealthy.


Yes, I read that. But until this morning I'd never heard of Jackson Hole.


Jackson Hole, I’m assuming.


Exactly, but why? Sorry I don't know anything about Jackson Hole. Is it a resort town? A financial center?


Arguably the best ski resort in the lower 48. The most picturesque mountain range in the lower 48, seen on the cover of Kanye’s new album. Snake river for unlimited rafting and fly fishing in ridiculously beautiful settings. Spitting distance from Yellowstone. Loads of quality restaurants to support it all.

What’s not to love? I’ve been a lot of places, and Jackson may always remain my favorite place in the world.


Okay that's interesting. Wouldn't expect most of those homes to be primary residences, but rather vacation homes. I wonder if those count too.


We're obviously all speculating here, but the rationale of Wyoming being on there has a few features of why it might make sense:

- Jackson Hole is indeed incredible

- WY has (recently IIRC) very pro-biz policies (akin to Delaware)

- No state personal state income tax

Establishing primary residence in a state to get tax advantages is nothing new, and probably more than likely the primary driver here.


Wyoming has no state income tax.

My mom is in a similar situation - she bought a home with my dad in Arkansas, but works in Tennessee. Given her income, it was significantly cheaper for her to lease an apartment outside Memphis and live there four days per week than it would have been for her to establish Arkansas residency and pay our income taxes.

She typically spends 4-5 days per week in Memphis, and flies back and forth between there and Arkansas - so this makes sense even considering the cost of traveling.

I wouldn't consider my parents "rich" by any stretch. Secure, yes, maybe even "well off" - but certainly not "rich" to the degree that we're discussing here. To a single person working in New York with a salary of $750k, establishing residency in Jackson Hole, Wyoming would save them $50k / year in state income taxes alone.


When we visited Yellowstone, one of the guides mentioned that Wyoming doesn't have any state income taxes. I suspect that might have something to do with rich people being officially resident there.


Although that usually means high property taxes.


Don't know if this is the case or not in Jackson Hole, but in general if a bunch of extremely rich people control most of the property in a municipality, they will elect a government that gives them low property taxes. It's not like they really need city services.


Jackson Hole had an awesome cameo on HBO's Silicon Valley, to give you an idea: https://www.youtube.com/watch?v=VmOd27UwTsg


Lots (rich) of people from Silicon Valley have second homes there. Its lampooned on the tv show Silicon Valley.


It doesn't take very many super-rich people to skew the distribution in a state with under 600k inhabitants.


This article, at least, talks about income, rather than wealth. Income we have a concrete measure for, at least, rather than attempts at estimation with giant unknown error bars. But income isn't a stable metric either. The IRS has been continually changing rules over time. Most notably, there has been a consistent push to crack down on "fringe benefits" and make them taxable. "Company cars" and things like that are essentially dead.

To some degree the changes in the income characteristics here reflect changes in the nature of compensation, from various tax dodges to just cash compensation. It was once easier to give executives a car for their exclusive use, rather than pay them the value of the car, since it was an allowable business expense. That is no longer the case (unless the car is intrinsic to their job) so rather than giving them a car and paying taxes on it, they just give them the money and let them buy their own car.

To what degree does this inform the changing characteristics of income in the top percentiles? That's an unknown question, but the best answer we have is just to assume that nothing has changed in the actual income distribution except the switchover from fringe benefit based compensation to taxable compensation. But that, unfortunately, renders moot the entire point of articles like this, about "worsening disparity", which is a convenient bogeyman to point to about the dangers of unchecked capitalism. So instead, we just pretend that this doesn't exist, and we continue to use made-up numbers to try to make a social point.


One more example of why income is not the right measure: Naples FL is always on these lists, a place I'm very familiar with. There are a few hedge fund types using Florida as a haven from state income tax, they have big houses on the beach. That's your 1% of Naples. Then there are tons of retired folks from across the wealth spectrum. Retired people can be quite well off and have a low "income."


"Wealth" isn't a very good metric for other reasons as well. Notably, lots of people who make median-ish income save every penny for retirement and accumulate a lot of wealth, but they are often categorized as "greedy top X%". In our zeal to find someone to lay blame on, we often pick the wrong targets.


> Notably, lots of people who make median-ish income save every penny for retirement and accumulate a lot of wealth

Not even in the same ballpark. You're not getting to $100mm in wealth on a $50k salary. But you can be born in to it overnight. Or make that in one day in the market if you're Bezos.


This is precisely why my goal is to set up my children better than I was and teach them to do the same. As long as I am constantly improving and can share that with my children I am happy. Comparing yourself to others, specifically to the super rich, is not a healthy strategy long term.


I didn't claim $100mm; I was thinking more like $1-10M.




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