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Fundamental attribution error and inequality July 6, 2017

Posted by hslu in Economics, education, Social Issues.
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Do you think poor people are poor because of their own bad choices? Are you biased because you have such a disparaging view on people of lower social status?

https://www.theguardian.com/us-news/2017/jul/05/us-inequality-poor-people-bad-choices-wealthy-bias?CMP=Share_AndroidApp_WordPress

The article didn’t talk about public policies which are partly responsible for creating the inequality in the first place. Requring food stamp holders to work for benefits they receive from the tax payers will reduce the number of people in the program. A recent report documented this.

Unless someone is didabled, ask him/her to work for his/her benefit will help build his/her character and working experience so that he/she can return back to the workforce and make a honest living instead.

People in general are lazy by nature. Just ask those people who make new year resolution to lose weight year after year. They just couldn’t do it because they are in most cases lazy. Exercise is hard. Eating a piece of pie is so much easier.

Four horsemen and Inequality March 6, 2017

Posted by hslu in Economics, Social Issues.
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Walter Scheidel is a Stanford professor who in his book: “The Great Leveler: Violence and the History of Inequality from the Stone Age to the Twenty-First Century” identified four indisputable and truly effective ways to reduce inequality: war, revolution, state collapse, and deadly pandemics. 


https://qz.com/924034/how-to-reduce-inequality-history-suggests-the-only-effective-ways-are-death-and-destruction/

That’s quite a powerful statement indeed. People have suggested education for the masses as a way to shrink the wealth gap. But it is not very effective.

Other than the “four horsemen identified in the book, I can think of a few other ways to reduce inequality in a nation: progressive tax on wealth in addition to income, 90% tax on the extremely rich segment of the soceity, effective redistribution system like generous welfare program and communism.

Inequality is the product of capitalism. Human is inherently un-equal in many ways: look, IQ, race, health, willingness to learn and family background, among others. 

Capitalism has a way to enhance the gap among people in a winners-take-all system. 

So, is it fair to say that America is the post child of inequality because capitalism reigns?

2016 Election August 22, 2014

Posted by hslu in Congress, Economics, Global Affair, jobs, Middle East, Military, Obama, Politics.
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Although it is still too early to talk about 2016, many candidates have started testing water in Iowa and New Hampshire.

Many of them probably have already done interest group sampling to find out the issues voters care the most。

I believe it will be ‘inequality’ especially if Hillary is the front runner of the Democrat party.

People care more about their pockets and how much money is left after paying all their bills. Foreign policy issues are important and Hillary’s accomplishment in this area is nill but when push come to shove Americans care about whether they have enough money to take care of their families more than anything else.

Hillary belongs to the 1%. She can’t wiggle out of that perception than she  did on Benghazi that easily.

Up, Up and Away! March 21, 2014

Posted by hslu in Economics, Global Affair, Gold, stocks.
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Something is happening at a breakneck speed since 2003 and, yes, you’ve guessed it: the rich get richer, and that’s exactly what Bernanke wanted with his now infamous QEs: trickle down economy.

For trickle down mechanism to work, two things have to happen: First, the rich has to get richer and, secondly, the rich has to spend their riches.

Worldwide 2014 there are:

  • 1,682 billionaires:up 82% since 2003;
  • 37,104 $100-millionaires:up 62% since 2003;
  • 167,000 $30-millionaires:up 59% since 2003.

There is no doubt that the first part of the trickle down puzzle is in place but the riches haven’t spent their money as much as it is needed to move the US economy to break free speed.

That’s why QE3 is still in progress now.

In the mean time, wages for the middle-income population have mostly been stagnant and many of them haven’t benefited by the rising stock and real estate markets because they don’t own that much stock to begin with. The values of their homes have barely moved back to the pre- great recession levels.  Few of them own any gold.

US median Household Income Dec 2007 - June 2013

The US economy has been limping along at 2% for the last 5 years.

Can we call this progress?

Yes, it is for the riches and it is the natural progression of capitalism. It is wealth distribution from the middle class to the top. That’s what is supposed to happen when capitalism is the rules of the game of the society. This has been the rules laid by the United States for other nations to follow for many decades in the past.

Way back in my JH days, I learned in my 公民 classes that, according to 国父孫中山; Dr. Sun Yat-sen, that one of the ill effects of capitalism is inequality of personal wealth between the haves and have-nots. Sure enough, inequality is at its utmost extreme in the United States because the single most important objective of capitalism is the accumulation of profits. With unlimited hot money provided by Bernanke, the riches on Wall Street and other places in the world, sure had a good friend in the most important position in the world.

I kept wondering that when will the inflation time bomb explode?

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