[enraged_camel]

>>Just a statement like "where the bottom 10% live as well as the top 10% do in developing countries" really shows you haven't been outside your home town.

The real problem with that statement is that it misrepresents the problem.

The fact that our poor live as well as middle class (or even upper class) in developing countries does not mean anything, because our poor do not compete for the same resources and opportunities as those people. Our poor compete with our rich, and the wider that gap, the worse the situation.

In other words, what really matters is the standard of living of our poor relative to that of our rich.

[tptacek]

That is a nonsensical assertion. In exactly what way am I worse off simply because some rich tool has a private jet or a Bugatti Veyron? I still enjoy a standard of living beyond the wildest imaginings of my great grandparents, or, for that matter, for the vast rural poor of Asia.

The problem of wealth disparity in the US is exclusively one of burden sharing: disparity is a problem when those of lesser means are required to make actual sacrifices, like risking bankruptcy for an appendectomy, or sending their kids to classrooms with a 45-1 student/teacher ratio. It's a problem implicating disparity because the Bugatti drivers could, it's often asserted, pick up a greater share of the burden while feeling less of the impact, because the marginal utility of their dollars is less than those of a poor person.

But the problem is not simply that there are rich people, or that they have things you & I don't have. Many of the things rich people have are stupid. But even when they're not, they almost never cost you anything; in fact, because the rich choose to soak themselves with Veblen goods, their extravagant purchases actually help you by driving the economy.

[EGreg]

Because the rich people drive up the prices in your local markets. I live in NYC, where the price of a shoebox apartment in Manhattan is sky-high (ignoring rent-controlled places). Why? Because tons of rich people keep apartments here. Had I lived in the middle of nowhere, I could have acres upon acres of land, a spacious, decked-out office, and gigabit internet, for much less than a two-bedroom apartment in NYC. Since everyone has to pay rent, this really affects you, but even if you somehow bunked with others, the everyday expenses such as a cup of coffee are more expensive in NYC. In Moscow and other cities it's even worse.

So yes, living among people who make much more than you obviously depresses your standard of living / cost of living.

[doktrin]

>> In exactly what way am I worse off simply because some rich tool has a private jet or a Bugatti Veyron?

Measures of "happiness" and "contentedness" are tightly bound to our environment. Being at the respective top or bottom of a given social order has a meaningful impact on quality of life perceptions. Obviously, some Maslow'esque hierarchy of needs applies here, and no-one in the world is happily starving.

> But even when they're not, they almost never cost you anything; in fact, because the rich choose to soak themselves with Veblen goods, their extravagant purchases actually help you by driving the economy.

That seems to make the implicit assumption that conspicuous consumption is the most effective means of investment for those assets. It may well be the case, but I've never seen it suitably demonstrated.

[tptacek]

Veblen goods aren't the most effective means of investment for the greater good, but their exorbitant cost funds the salaries of the craftspeople and engineers and technicians who make them, and the designers and writers who market them.

I'm not saying that buying a Bugatti is a social good; it clearly isn't. I'm just saying that those purchases aren't a drag on the middle class, except to the extent that they represent a missed opportunity for a more-just burden sharing to offset a needless sacrifice by the working class that could realistically be addressed by the rich.

Again the point is: simply sitting around being rich isn't intrinsically harmful to the lower and middle classes.

[doktrin]

> Again the point is: simply sitting around being rich isn't intrinsically harmful to the lower and middle classes.

Fair. I've long held the opinion that, within reason, "less" income inequality is better than "more". However, your statement is accurate.

[graeme]

The wealthy bid up prices. Depending on the industry, you can buy equivalent good and services for much, much less than you can in America.

Obviously this doesn't apply to an iphone, a private jet, or a Bugatti Veyron.

But if you want a haircut or groceries, it applies. Likewise to a host of other goods and services that the poor spend money on.

Give me bottom 10% in America ($10,500) and I'm very, very poor.

There are countries where you can live like a king on that same amount of money.

(It depends how much you value personal services such as maids, cooks, etc. which tend to be most affected by this phenomenon)

[tptacek]

The bottom 10% in America is not very poor, or even "poor", by world standards. The homeless in America have better health care today than Dwight Eisenhower had when he was President, and, obviously, better health care than the rural poor of China.

[newbie12]

Why? Our "poor" have televisions, air conditioning, cars, and homes. There's so much food in America that obesity is a major health issue. This is a profound success and departure from the normal human condition of misery. Please put down the Marxist textbook.

[seanmcdirmid]

> There's so much food in America that obesity is a major health issue.

Sort of stupid. It actually costs money to eat healthy, which many people can't afford in the states (fresh fruits and vegetables, grocery store far away, no car, just by crap at the convenience store then).

The US doesn't compare well to Europe on quality of life for those not in the middle class. Ya, they can afford some crap, but not what they really need to improve their lot (decent food, decent education, healthcare...). The libertarians don't really get that, and think everything is peachy perfect in the states (except for too much socialism).

[barry-cotter]

If you fry frozen vegetables in a wok with butter or oil and some spices it is delicious, healthy and very, very cheap. Adding beans or mincemeat for protein still leaves it at very cheap. I can't speak to the education system or public transport system in the States but frozen vegetables are surely available in most convenience stores, yeah?

[seanmcdirmid]

Not really. Also, frozen vegetables aren't very healthy for you; nutrients are lost in the freezing process. They work well enough for starchy veggies, but these are also the ones that make you fat.

[barry-cotter]

Oh well, I hate driving enough that most of the US is permanently off limits. Freezing does destroy some nutrients but generally a lot less than aging does. Picked from your garden beats frozen but frozen generally beats store bought fresh vegetables. Point on the limited selection but getting fat on a vegetarian diet is not easy unless you eat a crapton of stuff starchier than what you get in frozen veg. Potatoes, rice, pasta.

[seanmcdirmid]

It depends where you buy and what you buy. The poor in developing countries, ironically, get lots of vegetables and can be pretty fit (compared to ours at least). People don't really get fat because they eat too much meat (they can, just not common); its more the sugary and starchy processed foods that do it...and those sell like crack in the developed world.

Of course, one could always hit the gym...if they have enough money (or just move to California and ride a bike everywhere...if they have enough money).

[jfoutz]

I'm just gonna throw this out there... "In sum, we estimate that, as of the beginning of 2011, about 1.46 million U.S. households with about 2.8 million children were surviving on $2 or less in income per person per day in a given month."

http://npc.umich.edu/publications/policy_briefs/brief28/poli...

[refurb]

That's an interesting stat, but it confusing. Is this a case where people are not taking advantage of the social services offered? $2/day works out to $300 for a family of five.

This reminds me of Medicaid in the US. Something like 20% of the uninsured in America are actually qualified for free healthcare, but don't enroll.