Is "the rich getting richer" a problem?

[richardhutnik]

Kasz216 said:

The main focus of the original post had to do with the concept of the rich getting richer (compounding effect) and was asking if it is a problem.  Even this most recent NY Times article was connected with that to some degree.

As far as B, goes in connection with this, it goes back to the original point, that those who are better off, due to the compounding effect in gains, end up weathering down times a LOT better.  They have more to pull on, and use their wealth to increase connections, and so on.  The trip downward isn't nearly as rough as it is for everyone else.  It isn't they who suffer when there is down time as it is with those who are far less well off.  They don't live paycheck to paycheck the way the Middle Class increasingly is.  And individuals who have 3 jobs, ALL of which are needed to survive, get hurt big time if there is a loss of any of them.

This connects back to the original point asking about whether the rich getting richer is a problem.

It connects.  It just doesn't make any sense whatsoever.

Like I showed earlier, there really hasn't been much of a compounding effect if any over the last 20 years or so.   Personal Gini coefficent remained fairly unchanged.

If we're talking income that is.

That the rich have more money is common sense... in that they are rich.   If things ever get bad for a rich person they can start living like a middle class person.

The Gini coeeficient did get worse earlier last decade, right before the bubble hit.  During the years of Clinton, where taxes went up on the upper end some, it got softened.  Now, it is still a bit early to say what is going on, but apparently the wealth are doing better.

Now, the thing is that years of the compounding effect could of taken its toll, if it is a bad thing, resulting in such a separation in income and income gains, that growth has stagnated.  

And it isn't just the fact they have more money, but the quality of what they have that makes a difference.  And, the way things are, the rich have a much easier time also getting credit, and life works that, as a rule people are more likely to get help when they need it the least.  The person who is able to get a different job, is far more likely to do so, when they are working.  When a society is doing well, it builds on itself also, and this leads to a separation.