So, since you are heavily into this Social Darwinist view of things (everyone is an unconnected island to themself), feeling there is no downside to the whole "Rich gets richer" and don't feel anything needs to be done to keep it in check, like rich people practicing philanthropy, do you care to tell people here why there aren't any isses with the Matthew effect, which is "the rich get richer"?

Here is an article on the Matthew Effect, you can go and refute: http://open.salon.com/blog/danagram/2011/09/05/what_are_matthew_effects

Thank you for all the kind words. Notice in your first sentance after you say "Bull!" you are supporting my statment of diminishing returns based on the individual involved. I never stated that the returns were static across the board and as a diminishing value there will always exist some benefit. The concept is that higher returns can sometimes be acheived from other individuals who aren't rich. Acheiving those returns is often addressed through a system of loans, as stated.

I stated that the rich getting richer effect is good, not bad. Also, isn't it a tad unfair to generalize the education system as leftist? My univesity happens to be vastly conservative and I was taught traditonal economics and non-keynsian modern economics, after the fed essentially. 

Progressive taxes are not the same as wealth redistribution and I never claimed that was what I felt should be done economically. The United States federal income tax has always been progressive.

There should be riches and poor, but it becomes a problem with the gap becomes so big that results in many problems.

The rich will use/buy the law to give themselves advantages.
The law becomes corrupt and becomes a tool to herd the general population.
The poor is so poor that they got nothing to lose, resulting in crimes.

The rich fear the poor.
The poor fear the law.
The law fear the rich.

^ very good points in a short time

I would like to add that there is a difference in "riches" and "wealth". So it is necissarry to differintiate between the two in this discussion to avoid some confusion.

The only thing that I could add is that if you look at various points in history and the economic ebbs and flows, there does seem to be significant turmoil on the masses in points where the disparity of "wealth" is great.
Once there can be an application of wealth (i.e. mass production of the automobile) than you can see a benefit to it and microecenomic advances can be attributed thusly.

Yes Rich, it's an intrinsic problem with capitalism and the only solution is heavy taxes on the very rich.

I'm especially pissed off at the taxman today, as I've just found out that my airport tax will be greater than the fare on my flight to Hong Kong.

The problem wtih this mentatilty is that jobs are created as a result of the middle and lower class having more money to spend. Job's don't exist if there are not markets for the goods and services that X company creates. If that feedback loop fails, which it has in America, then the rich aren't going to spend money to expand buisnesses and therefore no new private sector jobs become available.

A common misconception is that wealthy people spend more money on goods and services than the middle class do and data has shown that the average wealthy person still only buys the about the same amount of product as the average middle class person, so the wealthy are holding more money while only spending about the same amount of money. Given that the wealthy are are less than 10% of the American demographic (this includes the super wealthy 1% on down to people making around 250k a year)

Here's a TED conference on economic growth, some of which I have paraphrased here http://www.youtube.com/watch?v=iIhOXCgSunc  that should suffice for an introdcution to that argument that the middle class are the job creators.

So the short answer is, the rich getting richer is not a problem as long as they are getting rich off investments made in the middle class.

And don't worry, in this paralyzing mess that is todays economies, none of us really understand what is going on. :)

There is one part of this argument that really doesn't make sense to me, so help me out here. The rich, no doubt, invest money into stocks and bonds, and that money is in turn turned into loans that are often taken by the middle class; but if the middle class debt to income ratio is high (which is the case in America) then it doesn't matter how much money there is to loan to the middle class. Loans will get rejected based on this.

With that being said, there is nothing wrong with some wealth being distributed as loans in this system, it is one way that middle class prospers, but this does not help the overall economy, which there is data that indicates that the average wealthy person spends in the same range on services and goods as the average middle class consumer. When you consider that gains for the wealthy have raised steadily and substatially over the last 30 years, and wages for the middle class have stagnated over that same period of time, a problem with the current implementation of trickle down economics starts to show its flaws. A job that paid 45K in 1980 only pays marginally better today while if the rate of increase that existed in the 1970's held true then that job would pay around 94k a year, which would maintain with the rate of inflation.)

The point I'm making is not that rich shouldn't get richer, and its not that the rich don't invest in the middle class, its that they are not investing evenly. Placing money in stocks and bonds, does invest money into companies which could be used for job creation; however, if consumer demand is low why would that company create jobs that only hurt their bottom line? That would be a waste of invested money. Instead if those investments were placed into employee salaries, then the middle class that would profit from that would be able to invest in loans, services, and goods, which would in turn spark comany growth, job creation, and higher bottom lines for these companies.

 

yea the problem is money has gravity, it atracts more money

market regulations and taxation has to keep that in check, because too much money accumulating on some few individuals is bad for the rest

There is an inherant problem to the statement.  Poor people inevitably spend money on something bad, too. Lottery tickets? NASCAR comemorative plates? Many in the middle class can do it too.

If anything, the inverse is true. People tend to become rich by investing properly, saving properly, and spending as little as possible. If you look at lottery winners and bankruptcy, you see a huge issue in the fact that many people are poor because they make horrible choices with money if they obtain it by luck.