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Comment by mirimir | Hacker News Reader

> The central issue in American politics is the economic security of the middle class and their sense of opportunity for their children.

Maybe for Mr. Summers, it is. And maybe as well, for liberals generally.

But there are at least a couple problems. First, many Americans are apparently convinced that some other issue is central in American politics. Maybe it's threats from foreigners. Or from Satan, or some proxy of his. Or perhaps, it's losing their guns. Or whatever.

Second, even among those who agree that the economic security of the middle class is the central issue in American politics, many have been convinced that rewarding wealthy capitalists is the best strategy.

So it goes.

Edit: Indeed, many middle-class Americans think that they're wealthy, and so don't care so much about the middle class.

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The article is from a while ago, but I wouldn't be surprised if it were still true: 19% of Americans think they are in the top 1% and 20% more expect to be one day [1]. So a full 39% of Americans either suck at math or actually believe that by rewarding wealthy capitalists they are actually rewarding themselves!

1: http://www.nytimes.com/2003/01/12/opinion/the-triumph-of-hop...

That is funny :)

Maybe ~20% of Americans are well-enough off that they feel wealthy. But they have no clue what real wealth is. And indeed, in day-to-day life, it's pretty much invisible.

Edit: Gotta quote this:

> All of this adds up to a terrain incredibly inhospitable to class-based politics. Every few years a group of millionaire Democratic presidential aspirants pretends to be the people's warriors against the overclass. They look inauthentic, combative rather than unifying. Worst of all, their basic message is not optimistic.

> They haven't learned what Franklin and Teddy Roosevelt and even Bill Clinton knew: that you can run against rich people, but only those who have betrayed the ideal of fair competition. You have to be more hopeful and growth-oriented than your opponent, and you cannot imply that we are a nation tragically and permanently divided by income. In the gospel of America, there are no permanent conflicts.

> But they have no clue what real wealth is.

I think measuring "real wealth" by some relative metric like "top 1%" is misguided. To me, being wealthy means being able to live a comfortable life without worrying about your next paycheck.

I'm from Germany, but studying in China on a scholarship. The 1000 euros per month I get wouldn't put me among the German 1%, but in a country with a lower cost of living, I spend only half of what I get. When the scholarship runs out next month, I have a year of runway at my current spending level. That's wealthy enough for me.

> To me, being wealthy means being able to live a comfortable life without worrying about your next paycheck

Americans generally use middle-class to refer to this state. Things are good, you have a paycheck or two of slack, you can make a healthy retirement contribution and save a little each month, own (via debt) a decent house and car, go out to eat a few times a month, not pinch pennies at the grocery store, etc. Major changes like moving, getting a new car, putting a kid through college, etc. require some planning, maybe some financing, but are doable.

Real wealth would be owning a grand house and luxury car, not needing to work to sustain the same lifestyle (before retirement age; after retirement age this is baseline for not being poor), ability to self-fund a capital intensive business, casually owning multiple residences, frequent international travel, etc. Luxury cars are toys and putting a kid through college is painless. That kind of stuff.

Real wealth is not having debt.

I have no debt, some liquid assets, but still rent. I know I'm better off than a lot of the country but being in the top n% of income in the wealthiest country in the world but enjoying little of the amenities besides basic infrastructure seems difficult for me to think of myself in any way as "wealthy." Unencumbered is ahead of many but I think I'd far rather have $400k income (and, more importantly, the social status and connections that kind of occupation or niche implies) with $1MM in debt than some low six figure income with much more in common socially with the homeless and nonfunctional mentally ill.

With the increasing number of the middle class including full-time workers becoming homeless (especially now in Houston) some homeful people would be best to become less rejecting of the homeless and/or mentally affected who lost traction before them. Especially in such a case where it's so obvious that there but for the grace of god they go.

Regardless of natural disaster or not, the prevailing cutoff line is coming after your low six-figure income, since there's not much foundation remaining below that level.

If you are providing shelter or a more extensive domestic environment those are not functionally very much like six significant figures anyway, but you knew that.

that's not right. real wealth is having a low cost of capital.

the wealthy tend to carry debt because it's plentiful and cheap for them. access to cheap money gives them access to better returns than the average bear. if you are not wealthy, debt is expensive and not nearly as rewarding.

but having debt, of course, doesn't imply you are wealthy.

Nah. Someone with $25k assets and $20k debt is substantially wealthier (i.e. can use their money to accomplish more purposes) than someone with only $5k.

Having a major asset (like a house) owned outright might be closer to "real wealth" territory.

Not always true when someone having only $25K in assets is servicing a challenging $20K debt.

Someone else without debt having $5K in cash can sometimes jump at an opportunity that would be completely out of reach for such an encumbered debtor. They usually wouldn't have the $20K debt unless they had already spent all or more than all of their cash at one point, up to approximately $25K already spoken for.

Right on target with a house owned outright until the exponential rise in your pesky property tax gains enough momentum to become an actual threat.

I agree that there's far more to life satisfaction than money. But that's a different conversation. The point here is that people support policies that favor the top 1% because they foolishly believe that they're part of that top 1%. Or because they believe that they will be. Or because they believe that said 1% drives the economy.

> The point here is that people support policies that favor the top 1% because they foolishly believe that they're part of that top 1%.

Or because they do not believe in taking from others in order to themselves have something.

You literally ascribe people's actions and beliefs to foolishness, when a little introspection will show that others are not necessarily being foolish.

As far as I'm concerned, real wealth is the point at which you no longer have to work because your money is working for you AND that money is producing enough for you to be in the top 1% of earners in your country. (I believe that is $250k/year in the US, though I'd be fine with $100-150k)

Why is this important? Because at that point, you can do, say or believe WHATEVER YOU WANT without fear of losing your job and you have the capital and network to influence others.

To me, that's about $20M ($10M in my case) invested in a boring old three headed portfolio (50% index, 25% bonds, 25% international index).

Earning $20M for the sole purpose of saving it is not easy. The only ways i know of acquiring that wealth is through an inheritance, a significant liquidity event or by stealing it.

>>Maybe ~20% of Americans are well-enough off that they feel wealthy. But they have no clue what real wealth is. And indeed, in day-to-day life, it's pretty much invisible.

I suppose you could be in the 1% in your community and not nationally.

Well, those 20% aren't so deluded. In fact 12% of all Americans do enter the top 1% at least for a year. [1] (Granted it's not clear from the above link whether the poll question was worded to clarify this ambiguity.)

[1] https://www.nytimes.com/2014/04/20/opinion/sunday/from-rags-...

You don't "enter the top 1% at least for a year". To be part of the 1%, you at least have enough capital to live off interest indefinitely. Indeed, enough for your children to live off interest indefinitely.

It seems like you're talking about wealth and GP is talking about income.

Yes, I've been talking about wealth. I mean, I've said "wealthy" a few times :)

I think you mean "to be rich". To be in the top 1%, you, by definition, need only to have an income which is in the top 1% of the US income distribution. However, the lacuna between the income distribution and the power distribution is exactly what is misleading about the term "the 1%" when it is used to complain about the power of the wealthy in modern America.

Some people use top 1% to refer to income. Some use it to refer to wealth.

For range majority of people income relies on a job, and by doing it harder/longer/smarter you get a higher income. Our tax system peanalisies hard work.

The other option is to treat rich people as those with a lot of money, not those who are most productive.

When I think of someone who is rich, I think of someone who is wealthy. That means having a lot of wealth, more than 99% of the country. To do that you need assets of over $8m (2013) {1}

That amount of assets should be able, long term, to grow with inflation and still deliver over $100k a year to live on. Even if it didn't just withdrawing the cash at $100k a year will see you through for life.

1. https://dqydj.com/net-worth-in-the-united-states-zooming-in-...

So 12% of Americans sell a home at least once in their lives?

I think these kinds of misconceptions people have about themselves are quite common, in fact. Like that the vast majority of people think they are above average drivers.

There was this year that my friend sold her apartment... It was a lot more money than she originally paid for it. She got an awesome income that year.

For the article: > Using data from the Internal Revenue Service, Mr. Carroll showed that between 1999 and 2007, half of those who earned over $1 million a year did so just once during this period...

Yep. I will recommend reading https://en.wikipedia.org/wiki/How_to_Lie_with_Statistics

>>But there are at least a couple problems. First, many Americans are apparently convinced that some other issue is central in American politics. Maybe it's threats from foreigners. Or from Satan, or some proxy of his. Or perhaps, it's losing their guns. Or whatever.

This is very much by design. The state and controlling money interests are happy if people are complaining about guns, weed, LGBT rights, neo-Nazi marches, and so forth as long as the complaining does not involve economic insecurity and/or civil liberties.

The conversation in threads never goes beyond this point.

Yes, this is by design - and crickets (usually).

Even if it were by design, how can it be countered or worked around.

I'm not sure what else there is to say. Realizing what's going on doesn't accomplish much. I mean, what's going on has been obvious for decades.

Well, the majority still doesn't seem to get it.

And even those who feel it instictively, often can't express it well.

Right, and when you try enrolling people, you get tarred as negative, divisive, a communist, anti-American, etc. etc. etc.

>>Even if it were by design, how can it be countered or worked around.

My post wasn't meant to invoke a solution. I am not sure that there is one. It's quite the solved game.

In order to supplant an ideology, you need a new ideology. A coherent set of ideas, rather than a disparate list of complaints. When people understand (or at least think they understand) where their beliefs are taking them they're more likely to work together, which is necessary to accomplish anything. That's why communists, fascists, Christianists, Islamists, and anarcho-capitalists have organizations and magazines whereas people who are concerned about how behavioral economics affects modern capitalism do not. There's no such thing as Tverskyism.

I've been thinking about this for a while now, and the core of the divide seems to be that people divide themselves into groups and seek advantages from one another as if they're playing a zero sum game. That may or may not be by design, but it's what I believe to be the "how" of it.

The only solution that's ever worked to turn that around is sacrafice. People need to start intentionally engaging in "losing" propositions to win hearts and minds to a cause. It's only by delivering gifts that you can turn a competitive game into a cooperative game where everyone wins together. If everyone insists that they win first, then you're stuck.

More to the point, those interests are very good at manipulating people. And doing the old divide and conquer ploy. Creating a crisis, and reaching a false resolution.

I'm guessing that they'll become our AI overlords.

I'm confused by your dichotomy.

Isn't the war on drugs an issue that affects economic insecurity and/or civil liberties?

Don't LGBT-rights affect economic insecurity and/or civil liberties?

Don't people waving Nazi banners have manifestos that directly affect economic insecurity and/or civil liberties of those they target?

Is it just because they don't affect you directly that you've mentally put them in the "distracting identity politics" bucket?

No, it's because most of these problems solve themselves when there's economic security.

Those are complaints about specific issues and outcomes.

The inquiry at hand touches on the fundamental dynamics of the system that those issues and outcomes occur in. How people get manipulated into favoring the interests of the wealthy, over their own.

You have also left out an interesting third group, who are interested in the welfare of the poor, and believe the middle class have gotten far too much airtime and are basically the same as the super-rich with respect to the poor's concerns.

These folks don't come out much on a national level, but are prevalent in urban housing debates, defending the poor and rich alike against the (upper) middle class.

Yes, I did. But they're an even smaller group.

> So it goes.

Always makes my day :)

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