The Political Obsession with Middle-Class Markers
Glenn Reynolds at Instapundit writes:
"The government decides to try to increase the middle class by subsidizing things that middle class people have: If middle-class people go to college and own homes, then surely if more people go to college and own homes, we’ll have more middle-class people. But homeownership and college aren’t causes of middle-class status, they’re markers for possessing the kinds of traits — self-discipline, the ability to defer gratification, etc. — that let you enter, and stay, in the middle class. Subsidizing the markers doesn’t produce the traits; if anything, it undermines them."
(MP: For example, the political obsession with homeownership turned thousands, if not millions, of good middle-class renters into really bad homeowners and undermined the "American Dream.")
Megan McArdle responds and asks a great question: "Who but a lunatic would loan money to an eighteen year old with no job and no credit record, in the hopes that they will graduate college and begin speedy repayment?"
14 Comments:
"Who but a lunatic would loan money to an eighteen year old with no job and no credit record, in the hopes that they will graduate college and begin speedy repayment?"...
Hmmm, apparently there's some folks who didn't learn the lesson of the housing bubble and how that who scam on the taxpayers began...
People work about 40 to 50 years of their lifetime. During this time, people must accumulate enough wealth to maintain and even increase their standard of living and to support themselves and their children and for retirement. Higher taxes make accumulating wealth difficult. Why is this important? Wealth provides the foundation for economic growth. Unless wealth is formed and economic growth is achieved, the succeeding generations will have less chance of finding work, accumulating wealth and increasing their standard of living. The Socialist policies of government will insure that our children and grandchildren will have a lower standard of living. They will work not to accumulate wealth, but to pay the taxes for the spending excesses of our government.
As part of this shift to socialism, politicians use the class warfare tactics of rich against poor to generate support for policies. The fact is, most people start out with nothing and accumulate wealth over time. Many people move from poverty to being millionaires. Andrew Carnegie, Cornelius Vanderbilt, Bill Gates, Steve Jobs...all started with nothing and accumulated wealth that created well paying jobs so that others may accumulate wealth and so forth. The current economic and political policies will destroy this process of improving living standards for generations to come.
Jorod, your first paragraph was very good and is an accurate portrayl. Your second paragraph is myth-building narrative. Bill Gates did not rise from poverty to millionair. Bill's father was the senior partner in Seattle's most prestigous law firm while Bill was growing up.
Bill Gates, to his credit, did not languish in his life of privilage but instead drove to make something of himself in his own right (duh, understatement). Your premise does not suffer when accurate histories are presented. A driving capitalist U.S. presents opportunities for wealth creation to all and rewards so many from all walks of life and to the betterment of all.
buddy-
one anecdote does not demonstrate that class mobility is "mythical".
us citizens have more income mobility than any in the world.
The authors analyzed University of Michigan Panel Study of Income Dynamics data that tracked more than 50,000 individual families since 1968. Cox and Alms found: Only five percent of families in the bottom income quintile (lowest 20 percent) in 1975 were still there in 1991. Three-quarters of these families had moved into the three highest income quintiles. During the same period, 70 percent of those in the second lowest income quintile moved to a higher quintile, with 25 percent of them moving to the top income quintile. When the Bureau of Census reports, for example, that the poverty rate in 1980 was 15 percent and a decade later still 15 percent, for the most part they are referring to different people.
Cox and Alm's findings were supported by a U.S. Treasury Department study that used an entirely different data base, income tax returns. The U.S. Treasury found that 85.8 percent of tax filers in the bottom income quintile in 1979 had moved on to a higher quintile by 1988 -- 66 percent to second and third quintiles and 15 percent to the top quintile. Income mobility goes in the other direction as well. Of the people who were in the top one percent of income earners in 1979, over half, or 52.7 percent, were gone by 1988
morganovich said: "buddy-
one anecdote does not demonstrate that class mobility is "mythical".
That is not what I stated. I stated that jorod's statement was wrong and misleading about Bill Gates. I further stated that this was not necessary and that his premise of class mobility was correct. Myth making does not need to be employed to make the obviously compelling argument for wealth building.
A guy with Bill G's intellect (highest possible score on math section of SAT) and intense drive are going to have a great chance of mobility regardless of class beginnings.
"Who but a lunatic would loan money to an eighteen year old with no job and no credit record, in the hopes that they will graduate college and begin speedy repayment?"
That's only looking at the deal as pure funding.
Look at it from the perspective of bringing in people and producing college graduates, then it seems quite fine. The better response would be to provide more assistance such that these people can graduate and get the kind of work that pays the loan off.
Of course, there is always a better route - legislatively remove any post-secondary education (or any indirect indicators of it) from any selection criteria. Your loan market dries up when the demand at the other end isn't there.
bubbdy-
then i don;t understand the point of your arument.
are you just saying that bull gates should not be on that list?
that seems like kind of a nitpick.
and still, from upper middle class to "wealthiest in america" is still pretty extreme social mobility, no?
morganovich, I am saying that Bill G did not rise from poverty BUT of course he had a rise from upper class to the very top.
Here is what I stated in response to jorod: "Your premise does not suffer when accurate histories are presented. A driving capitalist U.S. presents opportunities for wealth creation to all and rewards so many from all walks of life and to the betterment of all."
My writing must be confusing to you or your reading comprehension is off.
buddy-
you describe the second paragraph as "myth building narrative"
"Your second paragraph is myth-building narrative"
that implies that you are talking about the content in the beginning and the other figures mentioned as well. you may not have meant to, but that's the clear inference from what you wrote.
if you were just talking about bill gates, then why describe the whole paragraph as "myth building"?
morganovich, take a break; you are over thinking this. i suggest making things and a good manufacturing position might be the prescription. :) (not being snarky but need to end this thread)
buddy-
i have no idea what that last comment was intended to mean, but it sounds to me like you wrote something that did not mean what you intended and are blaming the reader for your unclear writing.
if you wanted to make a point about gates, you could have said "i'm not sure bill gates should be on that list".
instead you described a whole paragraph as myth building.
perhaps it is you who need the break and might gainfully spend it in a writing workshop?
morganovich, "...sounds like"..
Now you are hearing things that were written? :)
"i'm not sure that bill gates should be on that list"
No, I am positive Bill Gates should not be on the list. I was quite clear about that.
My point, in other words, is that myth building about Bill G. takes away from the solid premise that great class mobility is very possible in the U.S.
BTW, I know many people from lower and middle income backgrounds who work at MSFT and their mobility is quite impressive -- thanks to the upper income background Bill G.
buddy-
but that's not what you wrote.
now you are just nitpicking to try to get out of having made a mistake.
what is so difficult about saying "what i wrote wasn't clear, let me rephrase"?
Bill Gates's case is hardly an ordinary one. That one was filled with a lot of family connections.
BTW, I know many people from lower and middle income backgrounds who work at MSFT and their mobility is quite impressive
Except that theirs is more luck and connections than merit, the only common bond. Never mind that you may be talking about law-dodging contractors, and not full MSFT employees.
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