wealth gap widens

Economic inequality is growing in the world's richest countries, particularly in the United States, jeopardizing the American dream of social mobility just as the world tilts toward recession, a 30-nation report said yesterday.

The gap between rich and poor has widened over the past 20 years in nearly all the countries studied, even as trade and technological advances have led to rapid growth in their economies.

With job losses and home foreclosures increasing and many of these countries now facing recession, policy-makers must act quickly to prevent a surge in populist and protectionist sentiment as was seen after the Great Depression, said the Organization for Economic Cooperation and Development, or OECD, which is based in Paris.

In a 20-year study of its member countries, the OECD found that inequality had increased in 27 of its 30 members.

The United States has the highest inequality and poverty rates in the OECD after Mexico and Turkey, and the gap has increased rapidly since 2000, the report said. France, meanwhile, has seen inequalities fall in the past 20 years as poorer workers are better paid.

Rising inequality threatens social mobility -- children doing better than their parents, the poor improving their lot through hard work -- which is lower in countries such as the U.S., Great Britain and Italy, where inequality is high, than countries with less inequality such as Denmark, Sweden and Australia, the report said.

Wealthy households are not only widening the gap with the poor, but in such countries as the United States, Canada and Germany, they are also leaving middle-income earners further behind.

The OECD's Gurria urged governments to deal with the "divisive" issue of growing inequality.

"Greater income inequality stifles upward mobility between generations, making it harder for talented and hardworking people to get the rewards they deserve," he said in a statement. "It polarizes societies, it divides regions within countries, and it carves up the world between rich and poor."

In the United States, the richest 10 percent earn an average of $93,000 -- the highest level in the OECD. The poorest 10 percent earn an average of $5,800 -- about 20 percent lower than the OECD average.

*** [3/29/14]

Everyone knows someone (or is someone) who started from nothing and became something. The problem, as they say in journalism, is that the plural of "anecdote" is not "trend." Yes, some are born into poverty and work their way to the top. But most don't.

Just 4% of those born into the lowest income quintile eventually make it to the top income quintile, but 40% of those born into the highest income group will stay there as adults, according to the Pew Economic Mobility Project. Of those born into the lowest income quintile, more than 70% won't make it out of the bottom half of wage earners as adults. For those born into the top income quintile, two-thirds will remain in the top half as adults.

*** [3/29/14]

Movies on the subject on Netflix.

Inequality for All

Park Avenue: Money, Power and the American Dream

The One Percent

*** [4/25/14]

As a second-generation Irish American, I was a huge believer in the American dream as a kid. My parents quoted Walt Disney at the dinner table, and taught us that anyone could achieve whatever they wanted to in life, as long as they worked hard enough. Abraham Lincoln's rise from a one-room log cabin in Kentucky all the way up to the White House seemed to me like the perfect illustration of my parents' teaching.

It appears that my early faith in rapid social mobility in the United States might not have been entirely justified, according to a recent study. Gregory Clark, author of "The Son Also Rises: Surnames and the History of Social Mobility", has found that the pace of social mobility is much, much slower than we previously thought. According to his research, you may eventually succeed in raising the status of your family, but in some cases, it could "take 10 to 15 generations (300 to 450 years), much longer than most social scientists have estimated in the past."

Clark has conducted a rigorous analysis of surnames in order to track the rich and poor across the generations in England, the United States, Sweden, India, Japan, Korea, China, Taiwan, and Chile. Instead of just looking at one aspect of social mobility, he considers a wide array of factors such as wealth, income, occupational status, and education. His research focuses on surnames inherited by fathers because most of the societies he studied were characterized by this form of surname inheritance. Clark doesn't think the results would be any different by studying the matrilineal lines.
This is how he concisely summarizes his main thesis:

To a striking extent, your overall life chances can be predicted not just from your parents' status but also from your great-great-great-great grandparents'.

While believing that success depends very much on individual effort, Clark's findings seem to indicate that "the compulsion to strive, the talent to prosper and the ability to overcome failure are strongly inherited."

*** [7/9/14] Blake's thread

[7/29/14]  Read about this three generation rule in Ho'oulu 'Ohana Issue 04 2013 (which is a newsletter from First Hawaiian Bank Wealth Management Group.  Don't see the issue online, but the above would seem to contradict this rule.

Anyway, here's an excerpt from the article.

In her role in wealth planning, [Jodene] Arakaki is aware of the problems families can run into that diminish their wealth across generations.

Issues arise when their is a lack of financial literacy, less emphasis on family values and differences in generational approaches to handling and managing wealth, she said, adding that each generation perceives money differently because of the experiences each has had with it.

"Those in the first generation were the creators of wealth," said Arakaki.  "They are the immigrants who came to this country with hardly anything or the business owners who started their businesses from scratch.  These individuals worked hard and made personal sacrifices to build that family wealth."

"The second generation may not have had it as hard as the first generation, but they at least witnessed what their parents went through.  They had a chance to see the the struggle and sweat it took to get the family on track to a better standard of living.  So the second generation understands what it took to build the wealth and is more motivated to preserve the family's wealth."

"The third generation is fortunate in that they grew up reaping the benefits of their hard-working family members before them," she said.  "Because of this, they may not have the same perspectives or attitudes toward wealth as their parents or grandparents.  Without a sense of the personal cost to build that wealth, some of them might spend it more freely."

[actually that makes sense to me]

Dilbert the philanthropist

or capitalist or Republican?

Gerald Celente

The man who predicted the 1987 stock market crash and the fall of the Soviet Union is now forecasting revolution in America, food riots and tax rebellions - all within four years.

Gerald Celente, the CEO of Trends Research Institute, is renowned for his accuracy in predicting future world and economic events, which will send a chill down your spine considering what he told Fox News this week.

Celente says that by 2012 America will become an undeveloped nation, that there will be a revolution marked by food riots, squatter rebellions, tax revolts and job marches, and that holidays will be more about obtaining food, not gifts.

“We’re going to see the end of the retail Christmas….we’re going to see a fundamental shift take place….putting food on the table is going to be more important that putting gifts under the Christmas tree,” said Celente, adding that the situation would be “worse than the great depression”.

“America’s going to go through a transition the likes of which no one is prepared for,” said Celente, noting that people’s refusal to acknowledge that America was even in a recession highlights how big a problem denial is in being ready for the true scale of the crisis.

Celente, who successfully predicted the 1997 Asian Currency Crisis, the subprime mortgage collapse and the massive devaluation of the U.S. dollar, told UPI in November last year that the following year would be known as “The Panic of 2008,” adding that “giants (would) tumble to their deaths,” which is exactly what we have witnessed with the collapse of Lehman Brothers, Bear Stearns and others. He also said that the dollar would eventually be devalued by as much as 90 per cent.

[via chucks_angels]

divine retribution

America's opponents in the Middle East are gloating over the financial meltdown in the United States, painting it as divine retribution for past misdeeds against Muslims and the last gasps of a dying empire.

Hardline clerics across the region and groups like Hamas and al-Qaida took delight in America's financial woes even though it has not left the region unscathed, with stock markets across the Middle East dropping more than 10 percent last week.

"We are witnessing the collapse of the American Empire," Hamas prime minister in the Gaza Strip, Ismail Haniyeh, told worshippers during Friday prayers. "What's going on in America is a result of the violation of the rights of people in Palestine, Somalia, Iraq, Afghanistan and Muslims around the world."

Iranian President Mahmoud Ahmadinejad said Tuesday that America was paying the price for exporting inflation and deficits to the rest of the world.

"Now the world capacity is full and these problems have returned to the U.S." he said. "And finally they are oppressors, and systems based on oppression and unrighteous positions will not endure."

High level Iranian cleric, Ayatollah Ahmad Jannati, was more blunt addressing worshippers on Oct. 3.

"We are happy that the U.S. economy is in anarchy and the anarchy is reaching Europe," Jannati said. "They are seeing the result of their own ugly doings and God is punishing them."

Iran denies the financial crisis has hurt its economy, but the turmoil has helped drive the price of oil down more than 40 percent since July, shrinking revenues in a country that relies on oil for 80 percent of its budget.

Al-Qaida was one of the first groups to express satisfaction over the financial crisis.

"The enemies of Islam are facing a crushing defeat, which is beginning to manifest itself in the expanding crisis their economy is experiencing," said American al-Qaida member Adam Gadahn in a video released early this month.

One hardline Sunni cleric in U.S.-allied Lebanon saw the financial collapse as God's answer to Muslim prayers.

"God has responded to the supplications of the oppressed people," Mufti of Mount Lebanon Sheik Mohammed Ali al-Jouzo told the state-run news agency Thursday. "It is the curse that hits every arrogant power."

Associated Press writers Bassem Mroue in Beirut, Lebanon, Ali Dareini in Tehran, Iran and Karin Laub in Ramallah, West Bank, contributed to this report.

The Evolving American Dream

Much has been written about the broad economic and technological changes in our lives. But just how are we handling these changes? I have been tracking public opinion since the late 1980s, and the answer is simple: American attitudes and expectations are changing just as dramatically.

What do the changes mean for different age groups? We took a look:

The Private Generation (1926-45): The foot soldiers of a new army of volunteers grew to adulthood mostly without questioning authority. They will constitute the largest pool of octogenarians, nonagenarians and centenarians ever. From them we will learn how (and how not) to age with dignity and how to make the post-retirement years useful.

The Woodstockers (1946-1964): My fellow boomers stopped a war, marched for equality and helped usher in new values regarding gender, sex and the environment. We know the power of protest and how to use it. So we will force Congress to pass meaningful health care reform, and we’ll show how to live well and live within limits.

The Nike Generation (1965-78): Born into a world of assassinations, presidential scandals, abortion rights debates, military losses and record divorce rates, Nikes learned early that no institution is permanent, that relationships are fleeting. They’re creating a world of indie films and music, holistic medicine, organic food—and alternatives to traditional marriages, families and schools.

The First Globals (1979-90): Over half of these young Americans have passports and a worldview that is planetary. One in four “expect” to live and work in a foreign country. They’re instantly exposed to the entire world via the Internet, music, fashion and sports. They’re driving a new age of inclusion and authenticity. As our internationalists, they’re the least likely to feel that our culture is superior to that of other nations. They prefer not to take a simple pro or con on tough issues such as abortion, but rather to judge each situation on its merits.

In short, we see a fundamental transformation in the American character—and the American dream: living within limits, more modest expectations, a global view and a demand for authenticity.

happiness and stuff

http://www.gocomics.com/pricklycity/2008/10/05

older and wiser?

Are you getting older and wiser? Or just older?

The authors of a new edition of "Progress in Brain Research," a book for neurologists, suggest that in most adults a slowdown in reading speed (once assumed to be a sign of decline) actually indicates broader comprehension.

A younger brain may focus more deeply on relevant information, but an older one may take away more overall meaning from the material. The former behavior is fine for many purposes, of course, but the latter is instrumental in acquiring wisdom.

In studies where college students and older adults read material that included seemingly extraneous information, the older group took a longer time. But when both groups were quizzed on the material-including the extra items-the older adults performed better than the students. The authors credit a gradual widening of attention as a person grows older.

Eating for a better mood

The next time you feel blue or irritable, you may want to take a look at what's in your fridge. Researchers who study the food-mood connection have found that certain vitamins and other compounds in food can change brain chemistry. Foods influence the activity of neurotransmitters, the chemicals that convey information from one neuron to the next. Anything that affects these chemical messengers affects your mood—making food a pretty powerful "drug" when it comes to how you feel and act.

For example, several studies have shown that omega-3 fatty acids may be effective at combatting depression. One study found that a group of pregnant women taking 3.4 grams of omega-3s per day had significantly fewer depressive symptoms than those taking a placebo. And a review of 10 clinical trials showed a significant reduction in depressive symptoms among subjects taking omega-3s. The best food sources are fatty fish such as wild salmon, sardines, and herring. You may also want to consider taking a daily fish-oil supplement.