[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.