Here's another great segment from Niall Ferguson. Here he posits that Wall Street is not to blame for wealth inequality in the United States, and that the main cause of inequality in this country is the education system. Globalization is exposing uneducated American labor to Asian labor pools willing to work for a fraction of a living wage in this country, and the standard of public education in America has collapsed at a time when we need it most. Scary stuff:
Trending Content
| +95 | Are you “less ambitious” for having long term goals outside of NYC | 24 | 9h | |
| +37 | Interviews Are So Fake | 24 | 8h | |
| +33 | 2024 UK Election - Tories finished? | 20 | 20h | |
| +29 | Being Christian in investment banking | 14 | 14h | |
| +26 | Is my boss gaslighting me? | 3 | 6d | |
| +25 | Non-Competes Banned | 17 | 3h | |
| +22 | Ideas for things to do with a free semester before starting ft? | 9 | 1d | |
| +20 | Sabotaging Peers to Get Ahead? | 34 | 4d | |
| +18 | Best NYC neighborhood for single 30M | 12 | 2d | |
| How do I become Sigma | 12 | 1h |
Career Resources
Yep, pretty much. You could make the argument that the gap in educational attainment is a reflection of existing income disparity. However, I'd argue the disparity more due to Europe's pro-equality than some lack of education among Americans.
Europe has only been able to maintain a high standard of living for its working class due to massive entitlements, some trade protectionism, and high minimum wage laws. As we see now, such policies are unsustainable, and also hinges on the US indirectly subsidizing pharmaceutical R&D costs and defense. Europe also suffers chronically high unemployment, but nobody seems to have told the OWS people.
Ultimately though, unskilled labor is going to have to accept a lower standard of living. Ferguson would probably respond that we could retrain those individuals to have globally valued skills, such as engineering. However, the people most affected by globalization probably are not those well adapted to an information age economy.
This isn't to say education is unnecessary. The college bubble is probably one of the greatest mis-allocation of resources in our economy. But I am skeptical that it alone will reduce inequality.
I don't see inequality as the problem so much as class mobility. I think what Ferguson was trying to get at is how education should level the playing field. But, in my opinion, the home environment and value discrepancies between the rich and poor is not going to be overcome through the school system. You need to make the working class instill a respect for education in their children, and also empower teachers to create a productive class environment even in poorer schools. If that means harsher discipline for disruptive students, fine. Even "tracking" as seen in Germany would go a long way to providing that class mobility, although it reduces the ability of the individual to change career paths.
Just getting tired of people blaming everyone but themselves.
Agree with this to an extent, with the caveat that Wall Street itself is most guilty of this and has been given bigger handouts and figurative cheat codes than any "welfare queen" could ever dream of.
I am mostly speaking about people as private citizens.
Trust me, I am the biggest advocate of letting businesses fail. Econ 101, in order to prosper you must have failure.
To add...I agree that wealth inequality isn't caused by Wall Street. In fact, that's not the case at all. Wealth just grows with a sort of multiplier effect once you reach a certain point because your wealth is generated via capital gains as opposed to ordinary income. The tax rates on capital gains are lower than the higher level marginal tax rates on ordinary income, so, naturally, your wealth grows greater once you've got a solid base to invest.
The legitimate issues with Wall Street banks are not about wealth inequality, but rather equality of rules and the playing field not being level relative to everyone else in the economy (i.e. other industries.)
I suppose the argument that Wall Street is responsible for wealth inequality could be made, but only if it is based upon the absurd boom - bust bubble cycles that their financial "innovations" and self-regulation create, leading to a completely destroyed economy for just about everyone but the banks. Not to mention, the destroyed pensions and investment accounts of ordinary folks out there thanks to the crisis.
It is a lot easier to take $300m and turn it into $600m than it is to take your $24,000/year existence and turn it into a $500k nest egg. This is not because of capital gains tax, it's because of larger forces such as cost of living and the concept of investing/creating value/wealth.
Is this a problem? No, it's a fact of life, people need to deal with it.
government picks winners and losers regardless of what the market wants, which distorts everything.
finally - something insightful regarding ows.
....good luck with that.
Unfortunately, College in America is starting to become our next Public School system. Think about how many kids go to 'college' who can barely spell their own names. With government guaranteeing loans, people acting like college is a basic human right, and all of these bullshit for profit / online / joke 'colleges', you might as well make college obsolete within the next 10-15 years.
Jeffrey Sachs is a douchebag. I've had to read so many of his papers this semester, it's disgusting.
Also, how did Henry Blodget revitalize his career so much lately? From illegally hyping up tech stocks during the bubble to running one of the most successful business websites today? Good deal Blodget.
King,
I just started reading Mike Mayo's new book, and so far you'd love it. Check it out:
Exile on Wall Street: One Analyst's Fight to Save the Big Banks from Themselves
Oh nice. Thanks for the recommendation, I've been looking for something new to read. Much appreciated.
http://www.economist.com/node/21534792
The US needs real capitalism not this mixed economy, there should no longer be an implicit back stop for big companies. Imagine if we had done this for the carriage and buggy manufacturers, the reality is that we would have retarded growth. Big banks should have been allowed to fail, it is creative destruction, the idea that the whole financial system would have collapsed is largely bullshit. I abhor all welfare whether corporate or to private citizens.
Corrupti assumenda dolorem doloribus voluptas suscipit consequatur ut delectus. Sapiente tempora est ratione sit consequatur neque id atque. Debitis autem qui harum sed consequatur maiores. Recusandae velit eum illo laudantium quam. Veritatis eos eveniet rerum accusamus.
Sint eum et rerum molestiae. Fugit enim numquam cupiditate consequatur. Vel non enim laborum vel nam numquam vel.
Et ipsam tempora est qui sunt. Sunt nihil ipsa perspiciatis. Placeat ducimus iure officia pariatur cumque assumenda omnis. Pariatur dolor laudantium numquam eum ut corrupti nisi. Debitis natus deserunt maiores.
Est consectetur ipsam cupiditate quia eos dolor tenetur. Rerum eos dolorem quis. Non repellat consectetur sunt aspernatur dolorum. Omnis illum ut ratione numquam nemo labore ut. Quam quisquam velit suscipit rerum nostrum sed. Totam sit in exercitationem aut.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...