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richardhutnik on 15 June 2012
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Kasz216 said:
Aielyn said:
Kasz216 said:
richardhutnik said:
So now, it isn't just the rich getting richer, but the middle class lost like 40% of "net worth and the median declined:
http://www.nytimes.com/2012/06/12/business/economy/family-net-worth-drops-to-level-of-early-90s-fed-says.html?_r=2

So, if people want to branch out further, is this ok?

Uh Richard... did you happen to read your own article all the way through?

"The data does provide the latest indication, however, that the recession reduced income inequality in the United States, at least temporarily. The average income of the wealthiest families fell much more sharply than the median, indicating that some of those at the very top of the ladder slipped down at least a few rungs."

The earnings of the median family in the bottom 20 percent of the income distribution actually increased from 2007 to 2010, in part because of the expansion of government aid programs during the recession.


So what you mean to ask is it ok that the Rich are getting poorer, Middle class are getting poorer but the poor are getting richer.

Income, not wealth (AKA net worth). There's a massive difference.

Remember, the wealthiest families usually make the lion's share of their money through low-taxed investments, rather than through direct income. This option is not available at all to the poor, and not easily to the middle class.

If you'll note, they counted investments as income.  The fed always does.  The fact that they do have investments it states as why they weren't hit as hard as the middle class income wise.

Also, they specifically state the wealthy lost wealth (net worth).  Though not as much as the middle class.

It's all in the article there... or just the fed report if you want to look at that.

Well, connecting back to the "rich getting richer", even when it comes to times of loss, it can be seen that the well off have a LOT farther to fall before they get at risk.  Wit the middle class losing that much ground, it puts them in a place where they won't ever be able to retire.  And they are closer to a crisis totally wiping them out.  When you have that much money, you can survive it.  So, the compounding effect of wealth and advantage is at work again.

With the compounding effect, if the person on top is growing tripple, and the rest are barely getting buy, if even the top lost 2/3 and the rest lost half, the person on top is still relatively (and absolutely) better off than the rest.  

Here is an article on the loss on the upper end:

http://www.nytimes.com/2009/08/21/business/economy/21inequality.html?ref=incomeinequality

Again, it gets back to show that "the rich get richer" in the context of this thread, which asks about the compounding effect, may not necessarily be a good thing.