The 9.9 Percent Is the New American Aristocracy

[BRUTE]

http://www.theamericanconservative.com/ ... ification/

[jennypenny]

Before I read that article I was reading about Amazon's opposition to Seattle's head tax. I kept thinking that Bezos is worth over $100 billion. Why doesn't he take a billion of that and fix Seattle's homeless problem? Would he miss it (the money)? It would solve a significant problem and also help other (smaller) Seattle businesses by eliminating the need for a head tax.

I don't understand how some people (inc. here) idolize people like Buffett and Bezos but then criticize the '9.9%' for trying to make sure their kids attain a similar standard of living. Isn't that a typical desire for a parent -- for their children to live as good a life as they did if not better? I don't think that feeling is confined to any culture or socioeconomic group. And what about those parents who worked hard to get themselves into that group? How are they part of any problem?

I'm usually not a tax-the-rich-to-death person, but IMO no one needs that much money. If the top twenty billionaires contributed a large percentage of their wealth to Social Security, it would be solvent again. That would help to protect the welfare of millions while still leaving them billions each to invest. Seems like a reasonable price to pay to avoid the march to the scaffold.

[prognastat]

maybe some dividing and conquering is in order? according to brute's theory, it would be easier to manage the 50 states individually than to manage the whole US. this is why brute supports secession and federalism (and yes, states' rights).

I would agree with a decent bit of this. At least in the sense that there are problems with laws governing such a diverse population and topography. You run into the problem that one law doesn't work across the board. An example would be those advocating for a minimum wage being a living wage which I believe isn't unreasonable per se, however if you were to set a minimum wage for the whole of the US it is either not going to be a living wage in some cities or it is going to be way more than a living wage in some locations. There is no way to set one amount for everywhere in the US as the cost of living can very so much. Similar would go for allocating funds for schools in locations with vastly different cost of living.

To counter this shifting from a top down focus to a bottom up focus in politics would be necessary where the largest amount of government is actually the most local. So City > State > Country.

I also feel this could actually reduce the power of lobbying some too as lobbying a handful of politicians with a large amount of influence over all of the US is much easier than lobbying thousands of them each with mostly local influence.

trades
- there are many unemployed/underemployed humans, yet there are millions of job openings e.g. in skilled trades
- the gap between these 2 circles consists mainly of trade skills and geography
- trade skills are skills and require investment of time and money, but are not innately impossible for most humans (not affected much by the IQ argument)
- the geographical gap is due to humans being emotionally attached to their place of living, because of imperfect knowledge ("the same job pays 2x as much in North Dakota"), and to a degree because humans don't value money over everything else.
- the reason for the trade skill gap, in brute's opinion, is mostly cultural and imperfect knowledge (which is part of the culture). blue collar jobs have a bad image, and many humans literally don't know that their plumber makes way more than they do.

college
- there is also a large negative gap (oversupply?) between college jobs and college grads. this has led to an extreme zero-sum game, the aforementioned "requires college degree and ability to lift 25lbs" situation, where human children now go tens of thousands of dollars into debt to work as a barista.
- brute thinks that government subsidy of college has done a lot of damage here, but so has the "college for all humans!" culture. it's not that not all humans deserve college, it's that college isn't a good investment for most jobs. trade schools would serve many humans much better.

so in brute's opinion, it's largely a cultural issue plus some deregulation. brute thinks it's pretty easy to deregulate in principle, but has no idea how to change culture.

It's an unfortunate situation and one that I believe is going to be very hard to change. No parent likes to think their kid isn't smart/capable enough to pursue college and I'm sure the kids wouldn't be thrilled about being told this. No college wants a drop in enrolment. Businesses that hire college grads want there to be more competition not less as this will lower wages for those jobs which saves them money. Few politician want to piss off students, parents, colleges and business. Doing so leaves them without donations for their next election from business and without the votes from a large swath of the public.

in other news, brute just realized that he likes pareto improvements. he's very opposed to banning rich parents from tutoring, but is all for helping out poor parents or children - probably because that doesn't necessarily affect any humans negatively, thus being a pareto improvement. notably, brute would include raising taxes in "hurting others", so raising taxes to help the poor is not a pareto improvement.

I do disagree that we want aim for society to conform as much as possible with a Pareto distribution as that leaves the largest group of people at 0. People with nothing to lose do crazy things. In my opinion having too much inequality leads to revolt and having too little leads to stagnation. We need the right balance where there is enough for those at the bottom to be content enough while still having enough opportunity to motivate people that are willing and able to strive for the top.

[jacob]

@brute - Here's another idea: (TD suggested it above.)

Allocate students randomly to school districts. This will ensure that all parents (rich and poor) have an equal stake in a given school. (This is essentially the ex-US solution. You have very little choice in which school you get to go to.) This should certainly increase the size of the pie that is the random school.

Of course this does not have a solution that goes from A to B. Rich people would bolt and pull their kids out and send them to private schools ASAP as public schools are still far below standard. You do have private schools in Scandinavian countries as well but the quality-gap between public and private is smaller.

What's missing from all this is people realizing that their innocent and well-intended decisions to focus mostly on what's best for their own children has unintended consequences such as increasing class-based risk in the society that their own children will eventually grow up in. It's almost "Upton Sinclair"-like in how deep it goes: It's difficult to get the people in a society to understand something when the values of society depends on not understanding it. That's essentially the cultural problem and I don't know how to fix that either.

The thing is, the biggest strength of the US---the freedom of the individual and the dream that one can raise a family and live the American Dream---is also its biggest weakness. It worked well when there was enough land, resources, and opportunities for everybody. However, now there are so many people trying to eat that pie, that people are beginning to compete against each other. That's the essence of the problem here. If you're spending money on SAT training from grade 7 onwards, you're not trying to make your child any smarter in any capacity whatsoever. You're spending money to get a leg up on the competition. Since we're approaching the limits the "exponential growth" values of freedom are beginning to run into boundary conditions... hence the biggest strength becomes the biggest weakness.

In other countries, you'll rarely hear "you and your family" as a construct for everything from buying a car, preparing for retirement, getting your vaccinations, ... the phrase you'll hear is "you and society". That's an entirely different framework. It's very hard to see both at the same time or even see the other if one is steeped in one's own.

In any case, the situation appears somewhat deadlocked with no solutions in sight. This makes the outcome somewhat more predictable.

[prognastat]

Of course this does not have a solution that goes from A to B. Rich people would bolt and pull their kids out and send them to private schools ASAP as public schools are still far below standard. You do have private schools in Scandinavian countries as well but the quality-gap between public and private is smaller.

There could be a middle ground in that if you set up such a system they would pull their kids out of public schools and send them to private schools, however as long as the government doesn't subsidise this, by financially supporting this the taxes they pay for the schools would still be going to the schools and since they pulled their kids out and are instead paying extra for a premium education that leaves a higher amount per student still in the public school. This way they are still purchasing a leg up for their kids, but the public school system also has more available for the remaining students whose parents can't afford to send them to private school.

[jacob]

@prognastat - This, incidentally, is also how it works outside the US. However, doing it thus doesn't fix the cultural issue as it would still segregate rich kids and poor kids (as well as rich parents and poor parents). Effectively speaking, there would be fewer private schools because they would be more expensive. The only children who would attend would be the 0.1%. In terms of class-risk, this is probably safer though.

[BRUTE]

If you're spending money on SAT training from grade 7 onwards, you're not trying to make your child any smarter in any capacity whatsoever. You're spending money to get a leg up on the competition. Since we're approaching the limits the "exponential growth" values of freedom are beginning to run into boundary conditions... hence the biggest strength becomes the biggest weakness.

this is exactly the zero-sum point brute was trying to make. spending money on SAT training is zero-sum, because it will mean some other human child will not get that spot in college or whatever. educating a human child to learn a useful skill is positive-sum, because that human child can now increase the size of the pie.

brute doesn't think this has much to do with the "limits of exponential growth". zero-sum vs. positive-sum thinking is often more a societal/psychological phenomenon than an inherent characteristic of reality. in a sense, of course, the universe is zero-sum, all the atoms and energy used by brute are not available to other entities. but brute doesn't buy that even the limits of earth are anywhere close to being reached. especially in education, which is not very limited by physical resources (as opposed to e.g. energy), but only by the way humans organize.

regarding the randomized school idea, brute is not opposed, but skeptical. there are pretty hard limits geographically, since a human child from LA can't conveniently go to school in NYC. reasonable commutes are a huge constraints in jobs as well, which is why this whole urbanization/rent explosion thing is happening. children can probably only be expected to commute less than adults, more than an hour seems unreasonable.

thus, without randomizing where parents can decide to buy/rent homes, there wouldn't be much of a difference. sure, there are some schools/districts that are right next to each other with very different outcomes. but isn't part of the problem that poor humans can't even afford to live in Palo Alto, where all the good schools could reasonably be commuted to?

funding public schools with property taxes seems like a really dumb idea to brute. pretty much any other idea would likely work better - be it a flat tax, or even parents paying for school themselves (i.e. privatize the school market).

ps: brute disagrees with Dear Leader jacob on thoughts on family. most countries in Asia and Latin America tend to focus way more on their families than US culture does. individualism, yes. family? no.

[bryan]

I'm usually not a tax-the-rich-to-death person, but IMO no one needs that much money.

Eh, but does the <government> utilize the money better than the rich? Better than the poor? Better than Apple? Better than a mom-and-pop corner store? Better than Goldman Sachs, SoFi, Lending Tree, Kiva, GoFundMe, VC funds, Catholic Church, DACs, Wintermute/Neuromancer, etc etc. I think there are persons that need (i.e. should have) "that much money".. it's just that, apparently, and too often, those persons are not the persons with the money (for reasons? So maybe, sure, no one actually needs that much money? Or maybe those persons should be selected as the beneficiaries of regular taxes/lotteries/grants/whatever).

I definitely think the world will look a lot different in 50 years since it seems like governance hasn't really caught up to "new" technology (and existing processes are not looking great).

It's curious how "tax" regimes have varied through time and civilizations; I would love to read a book or blog post, essay on this. Anyone know of resources? I bet there are some older ones..

regarding the randomized school idea, brute is not opposed, but skeptical. there are pretty hard limits geographically, since a human child from LA can't conveniently go to school in NYC. reasonable commutes are a huge constraints in jobs as well, which is why this whole urbanization/rent explosion thing is happening. children can probably only be expected to commute less than adults, more than an hour seems unreasonable.

But, but VR, cyberspace, holodecks, Young Ladys' Illustrated Primers!! http://suburbanlion.com/blog/2013/04/09 ... lassrooms/

[prognastat]

@prognastat - This, incidentally, is also how it works outside the US. However, doing it thus doesn't fix the cultural issue as it would still segregate rich kids and poor kids (as well as rich parents and poor parents). Effectively speaking, there would be fewer private schools because they would be more expensive. The only children who would attend would be the 0.1%. In terms of class-risk, this is probably safer though.

Yeah I'm pretty sure this is how it was growing up in the Netherlands, though I was too young at the time to know exactly how it worked. I do agree it definitely doesn't address the disparity completely, but it would reduce it by lifting up the lower limit.

As much as I would like the opportunity for all children to be the same and to have the people that are most capable in the job best suited to their capabilities, however I doubt that will be happening any time soon. Given that there are few places that do this even in most of the countries with more of a social safety net. Even in those places parents would be unlikely to agree to not being able to buy a leg up for their children.

[IlliniDave]

Interesting ideas, not enough time to touch on everything that piques my interest.

I don't think one can distinguish much between tribes (in the context above) and family as most tribes of that ilk were pretty much extended family clans. I believe the "bias" towards family is the extension of that as the world grew crowded.

Yes, the US is very individualistic. That was/is quite deliberate. The rights of individuals were very deliberately elevated relative to that of the government. At the time it made the US rather unique.

Anyone who considers retiring before they are too old to perform a task for pay has more money than they "need" by a good bit. It's very easy to look at the other guy and say, "He has too much, take his!" Problem is, as that plays out many people will have their eyes on us.

Many of the ideas from the boutique N. European countries seem nice, but I'm leery they are scalable. I'll never know the answer, but I'd like to see what those systems look like 200 years from now as well. A nice thing about the US is that if you like more wealth distribution you can move to the West Coast and Northeast states (though perhaps ironically that will put you near a disproportionate share of the highest end of that 9.9%. If you favor less redistribution there are places you can select from in Flyover Country.

Regarding schools... When I was in grade school "busing" was a big deal in my home town (early 1970s). After more years of failure special tax levy's were imposed. After more years the federal government basically took over school system for a time. It's still to this day the worst school system in the state. The real problem isn't the schools or the funding or which student has to commute how far or who gets tutoring and who doesn't. I certainly don't know what the answer is, but it's really not a univariate problem and I think failed school systems might be more symptoms than causes.

[Sclass]

Regarding schools... When I was in grade school "busing" was a big deal in my home town (early 1970s). After more years of failure special tax levy's were imposed. After more years the federal government basically took over school system for a time. It's still to this day the worst school system in the state. The real problem isn't the schools or the funding or which student has to commute how far or who gets tutoring and who doesn't. I certainly don't know what the answer is, but it's really not a univariate problem and I think failed school systems might be more symptoms than causes.

+1. They did this in the LA burg where I grew up. Man did it suck. Ruined the schools. Now the real estate has gone up in value and the people buying the homes won’t send their kids to public schools. A cottage industry of private schools has sprung up. If you can drop $2M on a home you can prolly drop $30k/kid year on tuition. Now I read in the LA times they are closing down several of my schools because of lack of enrollment. Complete failure.

The system was disgusting and corrupt rife with reverse discrimination. A noble cause that just failed.

It created a freakish environment. We had Rodney King in the same graduating class as Richard Feynman’s daughter. It didn’t do Rodney a lick of good.

It’s one thing to have noble agendas, it’s quite another pulling it off.

[Campitor]

@jacob

You're assuming that I'm only teaching/helping my own family or that my family doesn't help the needy. That isn't the case. The article that we've been discussing claims, without any proof, that all or most of the 9%'ers are also not helping the less fortunate.

Enlightened self interest means that we care about society because when society does better it also makes life better for ourselves. The 9%'ers are our teachers, professors, doctors, lawyers, engineers, etc. Don't these professions help the poor as well as the rich? The roads, buildings, infrastructure, and technologies (which are made cheaper by new breakthroughs) benefit everyone. And if the poor, through help of others, reach the 9% status are we now going to disenfranchise them by making it harder to pass down knowledge and wealth to their offspring? How would African Americans feel about that? Or Latinos? Or Native Americans? I'm Latino and I don't like it at all.

The author cited some statistics but gave zero proof to his allegation that the 9% are stealing the poor's future. Correlation doesn't equal causation. To the author of the article, and anyone else who agrees with him, I would ask 5 questions:

1. What verifiable evidence do you have that the 9% are not helping the poor or directly harming the poor?
2. How will you determine which child has claim to educational resources when everyday new students arrive that are way behind the educational curve?
3. How do you plan to enforce these edicts in a free society where our Constitution guarantees freedom of association and commerce?
4. What will be the cost of administering this redistribution of educational capital?
5. Who outside of the 9% will be qualified to administer this program? Because if it's someone in the 9% then you're just perpetuating the asymmetry of power you're trying to eliminate.

We live in the technology/information age. Knowledge is the currency whereby all other benefits derive. Good luck trying to police knowledge.

[7Wannabe5]

Over the course of the last few years, I have taught in a low-income district full of recently immigrated children and the public school district associated with the most literate city in America. I have also tutored private students from wealthy suburban area and students from a neighborhood in Detroit that looks like fit setting for zombie apocalypse movie. I believe that there is no simple uni-rule change solution to this problem.

I actually earn my highest hourly wage tutoring the extremely disadvantaged children in the apocalypse zone. I steel myself to walk 2 blocks from the bus stop to the school in the morning, but I pay for Uber to drive me the first two miles north (up to 9 Mile, which may make sense to those of you familiar with Eminem.) out of the neighborhood at 3 PM, because some of the more ominous residents are awake my that time of day. While waiting for my ride one day last week, I witnessed a mother in an idling car scream at her young daughter, in reference to her son who was goofing off on the grass in front of the school, "Tell that m*f*cking b*tch to get his azz over here!" Then she jumped out of the car herself, apparently leaving it in gear, and the passenger had to reach over to apply the brakes to stop it from colliding with another vehicle.

One of my students at this school has high EI, low IQ, but no obvious disabilities. IOW, he's a very nice, not at all bright kid. He tries very hard to learn, and on one occasion he went to the trouble of returning to the library to apologize to me for goofing around a bit during his session. We offer small prizes to motivate the kids, and he said that he would like to earn some lip gloss as a present for his sister. He is 10 years old and he can't read. He is not capable of reading the two words "HELP WANTED." I helped him to sound out the word "bridge" and he asked me, eyes shining, "Have you ever seen a real bridge? I never have. I wish I could see a real bridge like in Spiderman." How many hours should society (my tutoring pay in this situation is ultimately publicly funded) of my labor should society fund towards the purpose of rendering this child even marginally employable as an adult?

[Smashter]

@7, what an eye-opening and sad story. It reminds me of a friend I have who used to teach in the worst part of Milwaukee.

Her particularly low performing first-grade students were often picked up after school by a parent or relative who reeked of marijuana or alcohol. Usually, the parent was also driving. When the kids are already way behind by age 6, and they go home each day to a home environment like that, what chances do they have at becoming marginally employable as adults?

[ThisDinosaur]

How many hours should society (my tutoring pay in this situation is ultimately publicly funded) of my labor should society fund towards the purpose of rendering this child even marginally employable as an adult?

You got me there. If a country is a community, then we have a responsibility to kids like this. Anybody who wants to be useful to his tribe deserves that opportunity. Whatever "deserve" means.

A page ago:

If IQ distribution is a bell curve, then one could assume that in an ideal situation, available and appropriate occupations would also follow that same curve as would income levels for those occupations.
...One caveat to all of this is the declining health of people in general (HQ?).

And then Jacob posted this link:
http://www.iqcomparisonsite.com/occupations.aspx

I think @jennypenny is onto something. There is more to the connection between the inequality problem and the healthcare problem than just the fact that healthcare is too expensive.

Notice how the low end of the range is above the average for doctors and lawyers. Both of those professions are targeted as members of the 9.9% in the article. Another rising income group is investment bankers,(not separated out on that IQ chart.)

Doctors, lawyers, and investment bankers are also better paid in the US than in most other countries. So there is lots of competition for those jobs. Competition attracts talent and money. And the training for all of them basically consists of a multi-year Tournament of hackable IQ tests in the form of standardized tests. (And both tuition and Test-Prep courses are expensive.) One explanation for high physician pay is that costs are untethered to any market forces, b/c no one price-shops.(As BRUTE pointed out in another thread, Americans buy health insurance for problems they already have, which is not how insurance works in any other situation.) Another justification for doctors' higher pay is the massive student loan debt they take on here vs. anywhere else in the world. Still another justification is the massive liability they face from lawsuits here vs. other countries.

So that ties lawyers, doctors, and bankers together into the US healthcare system, which represents 1/6th of our economy.
All 9.9%ers.

Maybe what we want to do is direct the competition of high IQ individuals away from expensive educations. There is an example for this in the Information Technology field. I've been told (computer professionals here can correct me) that much of university level computer science coursework is not relevant to real world application. Programmers can be hired based on experience and non-university certification.

The highest income outliers in the world are information tech billionaires. To be a billionaire requires you to be kinda smart. To be a tech billionaire requires you be 2-3 standard deviations to the right smart. And a lot of them are college drop outs.

[prognastat]

There definitely is a large cultural component to it. Fixing the education system would help more people, but wouldn't help many by itself. However as you mentioned already changing those cultural caused for the issue would require authoritarianism on a level few are going to agree to most of all in the US. Quite the opposite as currently culturally we are swinging away from making judgements between cultures and what is better or not making this less likely to happen soon.

[Mister Imperceptible]

“If you hire 20 million 7w5's to tutor kids day and night, will that make a difference? I honestly doubt it.”

There is only one 7w5. 20 million 7w5’s would not only make a difference, they would transform the world.

[BRUTE]

I've been told that much of university level computer science coursework is not relevant to real world application. Programmers can be hired based on experience and non-university certification.

it is accurate that CS is not very relevant to 98% of the work. as brute's friend likes to say: it's not a science, and it's not about computers.

the problem is that there also doesn't exist any other metric of how to hire programmers. experience is meaningless, skills are meaningless, education is meaningless, certifications are meaningless. it is difficult to tell how capable a programmer is even years after having hired him. might as well roll the dice.

[slowtraveler]

@Augustus
Having had dozens of high-achieving (Engineering/CS) Asian (Chinese, Vietnamese, and Indian) friends, not one of them was beaten or abused as a kid. Some were compared to others but that was it. They had an internal drive to succeed and do something. To my surprise, this was rarely forced or pressured upon them. Some had successful parents, others had lazy parents or even parents in jail. Most have had a mix of lazy and successful peers. Not one of them lived in a highly policed neighborhood, in US or abroad (not all were born in the states). At least one of the parents did seem to be there for them to talk to and they seemed to feel more cared about than I've seen is the norm in the modern USA system.

I've only seen the high police presence with poor 2nd+generation black and mexican (sometimes Hondurian or Guatemalan) communities where gangs were frequent and it does not in any way lead to higher achievement. Doesn't stop murders, theft, or dealing. It does lead to more hatred of the system and isolation though, which seems the opposite of what will help. These tend to have single parent households or both present emotionally absent even if physically there.

I think tons of 7w5's would be helpful since it would remove isolation, foster self-belief, and lead young folks to see a broader solution set of behaviors to engage in.

[IlliniDave]

Some more hometown trivia.

In the years leading up to the Great Depression my hometown purportedly had the highest concentration of millionaires per capita in the USA. $1M then is something like $14.5M now. Very similar to the tale told in the article, by the time I was growing up 50-60 years later there was no "aristocracy" that could trace back to those families--over time most of the fortunes had dissipated through the generations. The guys who wrote The Millionaire Next Door found a similar pattern. It's anecdotal, of course.

In the intervening 40-50 years the city's fortunes have plummeted. In many ways an archetypal Rust Belt story. A political machine cozy with unions resisted change, sought redistribution-based solutions that were unfriendly to growth and evolution. Having been away 30 years what I see now is a culture of victimhood and waiting around for someone else to fix things. I suspect that is based on generations of political promises that never quite panned out. Regardless, I think it is that environment which brings down the schools rather than the schools that bring down the environment. Some of the ideology taught in schools probably does amplify the process.

It's a tough juncture when a young person realizes that just showing up isn't enough to get on an upward trajectory.