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I hear a lot of chatter about the rich getting richer. That sort of talk is a generalization of course, since obviously there are rich people who get poorer, some go bankrupt, and a few do the full Madoff. But as generalizations go, it's true enough.

I wonder how people would feel if instead of saying "the rich are getting richer" we said "the smart are getting richer." Would it be just as true, as far as generalizations go, and would it make you feel the same when you heard it?

Capitalism rewards hard work, risk taking, luck, and intelligence. But are all of those elements equally important?

Hard work is common to all income levels. I would argue that hard work has the weakest correlation to wealth because it rarely does the trick on its own. You also need intelligence, risk taking, and luck.

Likewise, risk taking generally only works in combination with intelligence, hard work, and luck. In fact, you could argue that risk taking is just a facet of intelligence, especially when it works.

Luck and intelligence can each work alone to produce fortunes. But after the initial fortune is made, only intelligence helps grow it. Luck reverts to the mean. People who win lotteries rarely continue to get richer. But smart people routinely parlay small fortunes into larger ones.

So if we are looking for the best substitute for "the rich are getting richer," I would argue that your best fit is "the smart are getting richer." It's a generalization, of course, with plenty of exceptions. But it seems true enough. The interesting question is whether it has the same emotional impact as "the rich are getting richer."
 
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-2 Rank Up Rank Down
Oct 20, 2009
Now i'm receiving thumbs down for correcting myself? WOW!
 
 
-3 Rank Up Rank Down
Oct 14, 2009
"so if money and wealth are directly related, "

should say, "if money and intelligence are directly related, "
 
 
-3 Rank Up Rank Down
Oct 14, 2009
Lol, I don't know if we are that smart... I certainly don't have money, so if money and wealth are directly related, I must not be that intelligent. I think that I'm smart, but I know that I don't have skills that can be applied towards producing value. I have much less intelligent friends who are for more productive than I am. Maybe capitalism rewards productivity more than intelligence? How do you even define intelligence? If you are intelligent, but you don't have any useful skills or knowledge (ie the ability to produce something of value) how can you call that intelligence? For intelligence to exist, it must be measured against some kind of standard, and if you think about it, how much money you can earn is a great standard for determining intelligence. Most other standards for measuring intelligence seem fairly arbitrary. IQ tests measure your ability to solve puzzles against the clock. SAT's measure your likely aptitude for future accomplishment. Most standardized tests measure a persons recall ability. The market measures your ability to produce value. All of these tests can be said to measure "intelligence" so it is fair to say that we don't even really know what intelligence is, let alone have the ability to create a society that rewards "intelligence."
 
 
Oct 14, 2009
Ok. Thanks for clearing all that up.

And thanks for proving my point about the “hyperbole is debate” thing. It actually sounds like you and I are closer to the center on a number of these points. We both need to be more careful that we don’t make blanket statements that polarize the issues. That may have built the careers of Bill Maher, Rush Limbaugh, Keith Olbermann, and Bill O’Reilly, but personally, I’m getting tired of it.

Now getting back to this issue. The Smart get Richer. Personally, I think that the Americans with the most money had to give up something in order to get where they are. They either gave up their family life, their free time, or in a few cases their moral fiber. Frankly, it doesn’t bother me as much as you think. Because for me Rich or Poor is how much you have of the things that you charish. That could be money, material possesions, family, friends, respect from others, or freedom. In that regard I consider myself very wealthy. Sounds like you are too. Does that mean we're smart?
 
 
-3 Rank Up Rank Down
Oct 13, 2009
"Hyperbole? Of course it’s hyperbole. It’s what defines debate in this country. Suggesting that all you have to do to get rich is work hard and be smart is also hyperbole. Suggesting that all our problems would be solved by a free market is hyperbole. Suggesting that social workers, the clergy and law enforcement are “almost barely neccesary” is hyperbole. Suggesting that all governments are evil is hyperbole. Suggesting that you’ve made it in life without anyone else’s help is hyperbole."

I never even suggested that all you have to do to get rich is be smart and work hard. I never suggested that all of our problems could be solved by "the free market." Suggesting that clergy aren't necessary is hyperbole? They don't do anything for me. I never even suggested that all governments are evil. I've hardly "made" it in life, and I do receive help all the time. We all do. None of us would be here today if it weren't for people taking care of us when we were most helpless.

"Let’s throw another big word out here. Naivety. Some wealthy people started with nothing, but to think that being born rich doesn’t give you an advantage is naive. To think that breaking the rules doesn’t give you an advantage is naïve. To think that some wealthy people don’t use these advantages is naïve. To think that someone who lost 75% of his billion dollar fortune was hit harder by this recession than someone who is now unemployed is naive."

Naivety is not that big of a word. I never said that being born rich doesn't give you an advantage. Breaking the rules gives everybody an advantage. Poor people break the rules all the time. I break rules daily. I never argued that somebody who lost 75% of their fortune has it worst than somebody who is unemployed with no money. I was simply pointing out the flaw in the argument that money=more money. Only the smartest, most capable rich people remain rich. You're mixing arguments here.

"To suggest that anything worth doing is worth getting paid for, well…that’s just sad."

Money is representative. It represents resources and value. Of course I expect more resources and value out of an activity than what I put into it. Even if it means giving up my money for the feeling that I was able to help somebody. The greed lies within us, not the money. I value all sorts of things, as well as money, and I'm a well rounded person. I like helping others with my money as well as maintaining a nice quality of life for myself. I know, it's sad. But what are you gonna do.


"To suggest that our national defense would be better served by people who are only interested in a pay check, well...that's the kind of thinking that comes from people who've never put on the uniform and taken the oath. I think it's wrong but it's obvious that a can't explain it to you."

Why shouldn't good people with true love for our country be able to fight for it for a proper paycheck? Are you saying that they don't deserve it? Are you saying that our current system of forcing people to fight for next to nothing is better? You think that money isn't a driving force behind why many people join the military in the first place? The best contractors would receive the best business, so there would be a market for great soldiers. The better the soldier, the better the paycheck. JUST LIKE EVERY OTHER JOB ON EARTH!!!! It's people like you who pretend to speak for soldiers while maintaining a system of backdoor forced conscription in a supposed "free" society that make me a little sad.


"To never have heard "somebody suggest that GWB was dumb before and then delightfully draw an ironic view of GWB wealth in spite of said stupidity" is to be oblivious."

I was being sarcastic. Lefties think that it's saying something so profound to say that Goerge Bush is dumb. I've heard it so much, it's lost all impact, and it's just more hyperbole.

"Oh and another hyperbole? Suggesting that "if you can't take care of your kids and still have money left over to invest in opportunities, then that was a pretty poor decision" is hyperbole. Some of us can't think of anything more important than continuing the human race. To suggest that you will, in any way, have to pay for my children is downright offensive. I’m far too proud to have that responsibility taken away from me by anyone."

OH! thank you for the miniature versions of yourself! What would we have done without them?!!?!? I mean, except for the fact that studies show that even if we moved to a one child per family policy, it would take seventy years for the US population to start shrinking. The human race isn't going anywhere any time soon. We expect to add two and half billion people in the next forty years. I'm not suggesting that nobody should have kids, I'm simply suggesting that the only people who should have kids should be people who can

Afford to let one parent stay home to raise the children in their young years, or pay for a full time nanny.

Afford to pay for the child's education or at least be able to theoretically educate the child yourself. No Government babysitter for you!

Afford to pay for most of your child's college education.

If you can't do all of those things, you're depending on the government to raise your children for you essentially.

 
 
Oct 12, 2009
Hyperbole? Of course it’s hyperbole. It’s what defines debate in this country. Suggesting that all you have to do to get rich is work hard and be smart is also hyperbole. Suggesting that all our problems would be solved by a free market is hyperbole. Suggesting that social workers, the clergy and law enforcement are “almost barely neccesary” is hyperbole. Suggesting that all governments are evil is hyperbole. Suggesting that you’ve made it in life without anyone else’s help is hyperbole.

Let’s throw another big word out here. Naivety. Some wealthy people started with nothing, but to think that being born rich doesn’t give you an advantage is naive. To think that breaking the rules doesn’t give you an advantage is naïve. To think that some wealthy people don’t use these advantages is naïve. To think that someone who lost 75% of his billion dollar fortune was hit harder by this recession than someone who is now unemployed is naive.

To suggest that anything worth doing is worth getting paid for, well…that’s just sad.

To suggest that our national defense would be better served by people who are only interested in a pay check, well...that's the kind of thinking that comes from people who've never put on the uniform and taken the oath. I think it's wrong but it's obvious that a can't explain it to you.

To never have heard "somebody suggest that GWB was dumb before and then delightfully draw an ironic view of GWB wealth in spite of said stupidity" is to be oblivious.

Oh and another hyperbole? Suggesting that "if you can't take care of your kids and still have money left over to invest in opportunities, then that was a pretty poor decision" is hyperbole. Some of us can't think of anything more important than continuing the human race. To suggest that you will, in any way, have to pay for my children is downright offensive. I’m far too proud to have that responsibility taken away from me by anyone.
 
 
-2 Rank Up Rank Down
Oct 12, 2009
"All of the high-paying jobs that aren't in entertainment require you to begin by attending an ivy-league university. Those whose parents could pay $200,000 - $300,000 for their education get put on the fast track. Those who couldn't are seldom given a chance to shine."

I know a lot of people who started their own business who now make hundreds of thousands of dollars a year. They didn't go to Ivy League schools. Most of them just took a risk and worked hard to build something for themselves. Man, there are a lot of people who aren't happy unless they believe that there is an army of rich snobs who live in the lap of luxury thanks to lucky coincidence, while they scratch and scrape for nickles. That sort of narrative may be necessary to some weak psyches, but it sure is dangerous.
 
 
-5 Rank Up Rank Down
Oct 12, 2009
"I've seen way too many rich people who believed they got richer through being smart, when they mainly got richer by being lucky or by being rich to start with."

All you are doing here is repeating the same hogwash as dozens of other people on this blog. You're also not considering all of those people who started with small fortunes, attempted to turn them into big fortunes, and fell flat on their faces losing everything. The equation Money=more money is BS. I'm sure that won't stop 12 more people from saying the exact same thing. How do you know whether somebody got rich through luck or intelligence? Believe me, it takes intelligence to know when you have a chance to get lucky. Once again, we all had the LUCKY opportunity to go to school and make good grades and go to a good school. These are things we all had an opportunity to do. Unless you stumble and land into a big pile of money, it is fair to say that you probably had to do some work to get to where you are. And yeah, some people (unlike me) had parents and grand parents with the good sense to work hard to give them a shot at a better life than they had. This is something all parents should be doing, but most middle class families and lower have children with no plan for paying for their future. If the rich kids parents worked hard to give them a good life, why is it "unfair" that they receive the benefits? I mean, that was a big reason the parents worked so hard in the first place. Would you work more or less if you knew that all of your money was going to be taken by the government the moment that you died? There is so much rampant hyperbole here that nobody is answering to. Just keep spreading it as if it were fact.
 
 
Oct 11, 2009
I've seen way too many rich people who believed they got richer through being smart, when they mainly got richer by being lucky or by being rich to start with.

All of the high-paying jobs that aren't in entertainment require you to begin by attending an ivy-league university. Those whose parents could pay $200,000 - $300,000 for their education get put on the fast track. Those who couldn't are seldom given a chance to shine.
 
 
-6 Rank Up Rank Down
Oct 9, 2009
Bam, I gave myself thumbs up! Hah!
 
 
-3 Rank Up Rank Down
Oct 9, 2009
"Let’s overlook the fact that a good portion of the richest people in the world are royalty, and as such acquired their wealth by being born. While we’re at it, let’s ignore the fact that a large portion of the rest of them made huge fortunes by starting off with small fortunes. What about the rest of us little guys who are where we are because we’re dumb and lazy? Is there hope for us? I think there is. Here's some tips that I observed will have you climbing the income ladder in no time."

Royalty is an example of the government supporting someone while disenfranchising others. I don't see how this is a criticism of the market. A lot of guys who started with small fortunes and attempted to turn them into big fortunes lost everything and fell flat on their face. Of course, we don't hear about them. Their reward was commensurate with the risk they took.

"Stay away from career paths that don't pay well. Such as the military, nursing, social work, the clergy, law enforcement, or teaching. Those jobs will get you no where. Stick to really import careers like, banking, entertainment, professional sports, or hedge fund management."

If the military were privatized, soldiers would earn more money. Nursing would be a better gig if the AMA (more or less a doctor's union/cartel, both words essentially mean the same thing) didn't prevent them from providing more services and becoming entrepreneurs in the process. Teaching would be a better gig if the the US government didn't turn teachers into government babysitters who have to sit through needless trainings and meet unnecessary requirements (meant to make it look like the government is REALLY getting it's money's worth). Social workers, clergy, and law enforcement are almost barely necessary.

The recession actually did a good job of getting rid of a lot of the waste and over-financialization in the economy. A lot less people are getting degrees in finance since the credit crunch. Your point crumbles under even minor scrutiny.

"If you're looking to go to school and your SATs are too low to get you into law school or med school, pick an easy BD and then get your MBA. The classes are cake and they'll teach you phrases like," leverage your assets", and "fully-aligned high-performance teamwork". You’ll also learn to develop processes that will make it easier for your company to hire 3rd world children to replace all those union saps."

Here you are basically offending anybody with a business degree. Thanks. Are you suggesting we should just let the children of those countries starve? Or should they just continue to be poor forever? Or should we sacrifice our economy giving their economies an artificial backbone while basically relegating their place in the world to "the Earth's Dependents." Unions are just extortionists who don't have anybody's interests in mind but their own. They act as a cartel and lobby governments for special protections. Should we dive into the syndacalism that the UK ran screaming from?

"Don't be afraid to kiss the boss' rear. This will get you promoted before your co-workers. Most of them will despise you for it, but what do you care about those losers?"

Are you supposed to cuss your boss out and get a raise? You're there to do a job. If you're not both on the same page, something must change.

"Never have children. They're way too expensive and they’ll never pay you back unless they become rock stars or pro football players."

Rock stars only exist because of the GOVERNMENTS illogical support of patents. I don't think that people should have kids if they're just expecting somebody else to raise them or subsidize them. Thanks for your little bundle of joy that we all have to deal with and take care of forever and forever!

"Never give your time, energy, or money away unless you get something more valuable in return. Anything worth doing is worth getting paid for. If you start to develop an image problem, donate to a charity. But make sure the cameras are rolling and you can use it as a tax write off."

If there wasn't unnecessary regulation pushed onto the 3rd sector, charity could become a real product with a real market. All activities involve value being destroyed and value being created. Markets favor activities that do the most good for the least cost. Markets are moral. If we destroy lots of value to do a little bit of good for the needy, we're just taking everyone down when we could be helping everybody.

"Never live outside the United States. Every other country on the planet has oppressive income taxes. Do the math. If you make $50 million a year and the government raises your taxes by 1%, they just stole $500,000 from you. That’s enough to buy that second Ferrari. And what are those socialist pinko commie liberals going to do with your hard earned money? The woosies are going to waste it on unemployment checks, government health care, roads, and power plants. What crooks!!"

Actually, several nations have lower corporate taxes than we do. Including FRANCE!!!!! Several high tax nations, such as Denmark, actually require poorer citizens to pay a larger percentage of their income towards taxes. After all, they receive the bulk of the benefit.

"Never be afraid to profit from others. For example; if you find yourself in a position to sell a disk operating system to IBM for millions of dollars BEFORE you buy it for less then $20,000 from the guy who developed it, go for it. Don’t worry about that developer guy. If that hard working sap were smart, he would have sold his stuff directly to IBM."

I'm sure that you've heard that the vikings discovered America before Columbus. Why didn't they have the same success as later colonists? Well, they had a poor knowledge of the boon they had just ran into. They knew too little about markets and marketing to build any real success. Marketing matters. It's a skill, and it is work. Case closed. The same thing can be said about the steam engine. Sorry, that's life, don't even try to blame that one on capitalism. Blame it on pragmatism.


 
 
-2 Rank Up Rank Down
Oct 9, 2009
"Somehow I don’t think that most of the millions of people waiting on unemployment lines were members of the richest 1% of Americans. And I’d hate to say that the majority of them are stupid and lazy."

Now you are changing the argument. You (and a lot of other people were simply arguing that being rich was a ticket to more wealth. No, I don't think that the Americans who are being counted as "unemployed" are former members of that top 1%, but that wasn't the argument. The fact of the matter is that a larger number of "wealthy" people lost a lot of their net worth in the last recession. My net worth? Unchanged. Of course, it's there fault, they chose materialism. I chose happiness. You people, on the other hand, seethe with jealousy that the world doesn't work in your favor.

Millions of Americans in unemployment lines? Everywhere that I look, I see help wanted signs. My room mates girlfriend just got a job at macy's. The Dominos that I work at is hiring, and we're one of the slowest stores. Most of the people in those unemployment lines are just a holes with a sense of entitlement. I would criticize them more, but as a human being, I am also an idiot with an undeserved sense of entitlement. You just keep misrepresenting reality until everything fits into your narrative.
 
 
-2 Rank Up Rank Down
Oct 9, 2009
There is so much seething hatred and hyperbole in your comment that you must pretty much think every wealth person got there from crime and/or trickery. Everything you stated was simply some over exaggeration or a caricature of the truth. And you get a bunch of thumbs up........ I almost feel like throwing in the towel.
 
 
Oct 9, 2009
Tkwelge:
I agree with you that, in the general scope of things, we are where we are on the financial spectrum because we choose not to do what it takes to move up the ladder. The majority of us have the ability but lack the resolve. But I’m not sure that it takes smarts and hard work to get rich in this country.

Let’s overlook the fact that a good portion of the richest people in the world are royalty, and as such acquired their wealth by being born. While we’re at it, let’s ignore the fact that a large portion of the rest of them made huge fortunes by starting off with small fortunes. What about the rest of us little guys who are where we are because we’re dumb and lazy? Is there hope for us? I think there is. Here's some tips that I observed will have you climbing the income ladder in no time.

Stay away from career paths that don't pay well. Such as the military, nursing, social work, the clergy, law enforcement, or teaching. Those jobs will get you no where. Stick to really import careers like, banking, entertainment, professional sports, or hedge fund management.

If you're looking to go to school and your SATs are too low to get you into law school or med school, pick an easy BD and then get your MBA. The classes are cake and they'll teach you phrases like," leverage your assets", and "fully-aligned high-performance teamwork". You’ll also learn to develop processes that will make it easier for your company to hire 3rd world children to replace all those union saps.

Don't be afraid to kiss the boss' rear. This will get you promoted before your co-workers. Most of them will despise you for it, but what do you care about those losers?

Never have children. They're way too expensive and they’ll never pay you back unless they become rock stars or pro football players.

Never give your time, energy, or money away unless you get something more valuable in return. Anything worth doing is worth getting paid for. If you start to develop an image problem, donate to a charity. But make sure the cameras are rolling and you can use it as a tax write off.

Never live outside the United States. Every other country on the planet has oppressive income taxes. Do the math. If you make $50 million a year and the government raises your taxes by 1%, they just stole $500,000 from you. That’s enough to buy that second Ferrari. And what are those socialist pinko commie liberals going to do with your hard earned money? The woosies are going to waste it on unemployment checks, government health care, roads, and power plants. What crooks!!

Never get married unless your spouse is worth a lot more money than you. If you find yourself falling in love with someone poorer than you, DON'T FORGET THE PRENUP!

Never be afraid to profit from others. For example; if you find yourself in a position to sell a disk operating system to IBM for millions of dollars BEFORE you buy it for less then $20,000 from the guy who developed it, go for it. Don’t worry about that developer guy. If that hard working sap were smart, he would have sold his stuff directly to IBM.

Imagine how much wealthier this country would be if we all followed these nuggets of wisdom.
 
 
Oct 9, 2009
"This recession hit the higher ups the hardest."

Somehow I don’t think that most of the millions of people waiting on unemployment lines were members of the richest 1% of Americans. And I’d hate to say that the majority of them are stupid and lazy.

 
 
Oct 8, 2009
"The smart are getting richer". It's a two edged sword. On the one hand, it forces you to think and look back at yourself, rather than just shrugging off the helplessness suggested by the tired cliche. On the other hand, smarts are generally genetic. There are people who study all the time but learn and retain slowly, and there are those who never have to study because they are just naturally more intelligent, have better memories, or whatever. If you are in the first category, 'the smart get richer' just leaves you feeling helpless again. But now it's not some sort of economic injustice, it's the genetic rat race that you blame and you can go back to your nap at your desk.
 
 
-3 Rank Up Rank Down
Oct 7, 2009
Scott! You worked for your position in life! Help me out here!
 
 
-4 Rank Up Rank Down
Oct 7, 2009
"Uh, talk about the rich getting richer does NOT mean that individual rich people are acquiring more money. It means that the rich are taking a larger share of the national income. In the 60's and 70's one percent of Americans received roughly one tenth of the GDP; today they receive one quarter (these figures come from the work of Emmanuel Saez). So, Scott, do you believe that the top one percent of Americans have become 150% smarter in the last 3 or 4 decades?"

I would say so.. It certainly requires much more education to do anything than it did just a few decades ago. IF you graduated from a real college in 1970, you were the cream of the crop. Now, graduating from college requires passing MORE classes (many colleges used to not require a natural science as part of their degree plans) and you have less opportunity, because a lot more people now have college degrees. Things are more competitive now. And as I've said before, most of that "top 1%" isn't people living some aristocratic lifestyle. It's mostly people who are temporarily there because of some short term employment or business venture. We could also go into the whole "zero sum" argument. I can't believe that we are even having this discussion. I swear to god, it's like arguing with a brick wall. I"M POOR!!!! But I still look at what I've done with my life and what others have done, and if they're better off than me, they must of done SOMETHING to deserve it. Too bad I'm surrounded by bolsheviks.
 
 
Oct 7, 2009
Uh, talk about the rich getting richer does NOT mean that individual rich people are acquiring more money. It means that the rich are taking a larger share of the national income. In the 60's and 70's one percent of Americans received roughly one tenth of the GDP; today they receive one quarter (these figures come from the work of Emmanuel Saez). So, Scott, do you believe that the top one percent of Americans have become 150% smarter in the last 3 or 4 decades?
 
 
Oct 7, 2009
I just revisited this post having seen Google's quote of the day from Dorothy Parker:

"If you want to know what God thinks of money, just look at the people he gave it to."

Sorry, Scott. Though you (presumptuously reading between the lines) and I generally would only consider Spinoza's God to be real, so I guess that bites less.
 
 
 
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