Strong Eagle wrote:... actual earning power of the middle class has decreased significantly over the last 40 years... middle income debt is way up... and there is a good reason for this.
...because they're greedy, and seeking to live beyond their means? You know,
condo, Cartier, Carrera 911, and holidaying in the Caribbean each year?
Beyond such
discretionary spending, the biggest debt most will ever
choose to take on is a mortgage. But home-ownership is a desire, not a necessity; making that discretionary too.
You think middle-class earning-power has decreased? I'd say my parents slotted into that category. They bought a plot of land, a field, ('up north'), and my father built their first home on it, a small bungalow/single storey home. Both of them had full-time jobs, one in sales, the other in a service industry. I recall being stunned when some years ago, when I was describing having to fix up a rental flat between tenants, replacing the fridge 'again', and my mother made some passing comment that in their first home, they couldn't even afford to buy a fridge for something like 5 years, because they were SO expensive back then. So if spending-power, and 'purchasing-power' are the same, I see only that's it's *hugely* increased. The only general exception to that might be re: the price of land. But that's down to population growth, i.e. basic 'supply and demand', rather than greed.
Brah wrote:Is there a verifiable example of where trickle-down has actually worked?
Look at all the jobs created that relate to just Bill Gates. All the people around the world who are selling MS products, or servicing their products, or writing programmes for their products etc etc. An idea born at Harvard, and all that's later spawned from it, is probably responsible for now feeding/housing a statistically material proportion of the population of Bangalore/etc., in far better health and comfort than they would have if MS had never existed.
And observe Bill Gates, he, and all his legions of employees, and his companies, and people around the world working with his products must be generating almost incalculable sums of taxes. None of which would happen, but for Bill and his light-bulb moment.
And yet despite all of this, what does Bill and his wife decide to do? Set up their own philanthropic foundation. Note: They decide to do that, rather than simply write bigger voluntary cheques to the government. If I were them, I can think of a few reasons why I'd do that:
- Why give it to a government in 'additional voluntary tax', when due to the inherent inefficiency of government, that's going to see maybe 25% of it immediately p'd down the drain in admin/overheads.
- Why give it a government, who will politicise it, and only give it to projects that suit their own agenda and interests? (A parallel is donating to the likes of charity 'umbrellas' like United Way in the US, it's highly politicised).
- If money is power, why not retain that power, and beyond all the taxes you pay, and your company generates and pays worldwide, why not decide what kind of difference you might personally make. There are plenty of such private such foundations, the Gates have helped fund their own one to the tune of US$38Billion*, together with Warren Buffet? Is that sum good enough for any nay-sayers?
When I worked in private client banking I was in the 'Office of the CAO', and that gave me a very wide perspective over who our clients were, where their wealth came from, what their life-goals were, and how they and 'we' were going to set a lifetime course for them to achieve them. Most clients had some element of philanthropy within their plans. But also some had a wish to be philanthropic (other than via government) but simply didn't know how, how to target their giving in an informed and effective way.
Hence why you nowadays will find the likes of
http://en.wikipedia.org/wiki/New_Philanthropy_Capital
'(NPC) is a charitable organisation based in London. It states its mission is to direct more funding to effective charities and help donors make more informed decisions on how to give ... NPC has been called "the equivalent of an equity-research firm for the philanthropic marketplace."
And indeed when the CAO, myself, and many others were booted out of our bank in the post 9-11 rout, he was one of the original group that founded the above organisation. He could have gone on in his pretty stellar career, I doubt by then he'd hit 50, but he probably thought enough is enough, and time for something different (indeed he told me as much).
People with the means generally do want to help others, just not via governments with their inefficient self-interested blunt-tool taxes. Just because this giving isn't externally enforced, published, or visible, doesn't detract from the reality of there being much more of it going on in the background than the man on the street might imagine.
*
http://en.wikipedia.org/wiki/Gates_foundation
'In 2007, its founders were ranked as the second most generous philanthropists in America, and Warren Buffett the first'
