From: jwh@citi.umich.edu (Jim Howe)
Subject: Re: Increase in millionaires
Date: Thu, 27 Aug 92 15:41:20 EDT
Organization: IFS Project, University of Michigan
Reply-To: jwh@citi.umich.edu

In article <l9pvs1INNl3a@spim.mips.com>, mpolen@suntory.mips.com (Michael Polen) writes:
> In article <acj-zR=@engin.umich.edu>, jwh@citi.umich.edu (Jim Howe) writes:
> > In article <l9nnigINN7o@spim.mips.com>, mpolen@suntory.mips.com (Michael Polen) writes:
> > > In article <1992Aug24.134822.3715@desire.wright.edu>, demon@desire.wright.edu (Stupendous Man) writes:
> > > > 	Why do some people feel that the number of millionaires increasing
> > > > since the last election is a *bad* result?
> > > > 
> > > > 	If that number was 100% of the population (ignoring the inflationary
> > > > effect that would have :), would that be "a bad thing"?
> > > > 
> > > > 	It would seem that anything that helped raise the median income is to
> > > > be looked upon with favor.
> > > > 
> > > > 	Unless you're assuming that economics is a zero-sum game and these new
> > > > millionares did it on the backs of the poor.
> > > > 
> > > Sounds resonable to me.  We have more working americans below the poverty
> > > level than ever in our history.
> > 
> > Source?  The only report that I've heard about was a Census report (I think)
> > which made a statement similar to the one you are making.  Unfortunately
> > the statement is a misrepresentation.  I believe the statement was
> > that we have more workers earning a wage which is below the poverty
> > line for a typical family of four.  Unfortunately the results weren't
> > adjusted for workers who aren't supporting a typical family of four.
> > Even if your statement were 100% accurate you haven't demonstrated
> > a cause and effect between the number of millionaires and the number
> > of people working below the poverty level.
> > 
> I do not claim that more millionaires caused more poor people.  There is
> no cause and effect relationship between the two. 

This seems to contradict what you said in an earlier post.  The previous
poster stated "Unless you're assuming that economics is a zero-sum game..."
and you said "Sounds reasonable to me".  Sorry if I misinterpreted
what you said.

>
> They are both effects.
> The cause is 12 years of tax and benefit programs designed to aid the rich
> at the expense of all others.
> 

Care to elaborate?  The tax reform acts raised the lower limit at
which poor people paid taxes.  How did this aid the rich?

> The facts (more working poor and the top 1% controlling a greater portion
> of the wealth) support this assertion.

But who are the 'top 1%'.  I believe if you check, you will find that
the people who made up the top 1% in 1980 are not necessarily the same
people who are in the 'top 1%' today.  In other words, some people moved
up, some moved down.  All these comments about the 'rich' make it sound
like there is a constant group of people who are always benefiting.
Statistics may show that the *income group* has benefited, but this
says nothing about the individuals who make up the group over time.

>
> In this economy, the number of
> millionaires have increased because the government has taken from the poor
> and given to the rich. 

Evidence?  I will not deny that there are wealthy people who receive
government subsidies.  Subsidies which come from people with lower
incomes.  However I flatly reject the unsubstantiated notion that
the 'rich' have gotten rich because the government has taken from
the poor.  I don't believe any reasonable reading of the facts can
justify that position.

> The theory is that if a millionaire can afford to
> buy two expensive import cars rather than one american car, it will create
> more american jobs, boost the economy, and increase taxation revenue because
> the "workers" will have more to pay taxes with.

This is a perfect example of looking at the world with blinders on.  If
a person buys a foreign car, where did he buy it?  Probably a local
dealer.  At least some of the money goes to that dealer.  How did the
car get here?  It was shipped, creating jobs for dock workers and
transportation workers.  In addition, the money spent overseas 
comes back to this country in the form of foreign purchases of
local goods, services and investments.  The money doesn't just
disappear into a black hole.


James W. Howe                  internet: jwh@citi.umich.edu
University of Michigan             uucp: uunet!mailrus!citi.umich.edu!jwh
Ann Arbor, MI   48103-4943         

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