Greed is Good (Fodder for a broad discussion of economics :))

[rickb]

PS' example is hard for me, because I completely understand not wanting to have to work for somebody else your whole life, especially if your job isn't particularly fulfilling, as many aren't.  So, I'm not sure I'd call it greedy.  But, from a numbers perspective he'll definitely wind up with a lot more than many people will ever have.

I don't think there's any doubt at all that PS is not greedy - he simply wants to be financially independent.  In the context of actual rich people, PS is a complete loser.  From prior discussions here, my guess is he's going to retire early (or, rather, become financially independent early) with net assets of a few million (or less).  This is what actual rich people make in a single year.

[jafs]

Well, the definition of greed is certainly subjective.

A few million in assets sounds like a lot to me - more than we'll ever have or need.  And we live very well on much less than that.

The real problem is the massive imbalance in wealth/income across our society, as you pointed out.  And it's been pretty steadily increasing over the last 30 years, at least.

[Greg]

A few million in assets sounds like a lot to me - more than we'll ever have or need.  And we live very well on much less than that.

I would disagree. If we're talking 25X time expenses, right now I'm spending for my wife and I about $25k per year, not including vacations. I also don't own a home yet so I do an apartment and no kids yet and I cut down everything I can to get lower expenses per year. That would mean I would need at least $625k saved up and this is probably at some sort of expected rate of return so that you don't burn down all of your principal before you die.

If you increased that to $50k per year (not including vacations), which might make more sense for a larger home, extra kids, college expenses, medical bills, etc, that could very well be needed of $1.3M saved up. A few million I would suggest is no where near greedy, considering normal costs of living versus my (and perhaps PS's) sparse living expenses.

[Pointedstick]

Well, the definition of greed is certainly subjective.

A few million in assets sounds like a lot to me - more than we'll ever have or need.  And we live very well on much less than that.

So greed is relative? A few million sounds greedy to you because you have less; is $50,000 greedy to someone who has nothing?

The reason why I and others probably seem obsessed with this is that you and others like rickb seem to want to focus your discussion of greed on the very very rich, yet your broad and relative arguments would seem to apply equally well to people much less rich--people like yourselves, and me, and probably everyone here.

[Pointedstick]

If you increased that to $50k per year (not including vacations), which might make more sense for a larger home, extra kids, college expenses, medical bills, etc, that could very well be needed of $1.3M saved up. A few million I would suggest is no where near greedy, considering normal costs of living versus my (and perhaps PS's) sparse living expenses.

And then of course we need to take into account how expenses are relative to location. I bought my house in a New Mexico suburb for a little under 100k. I have a colleague back in the bay area who bought a very similar house (same number of bedrooms and bathrooms, roughly same square footage, same design and layout, etc) at around the same time and his total out-the-door costs were about a million bucks including all the required repair work. He also wants a big family with lots of kids, like 5 or 6 or something. In order to afford the mortgage on that house and the expenses of running that household at bay area prices, he's going to need to climb the corporate ladder for the next 30 years. I'm guessing he makes about $150k a year right now. Remember that this is the bay area, so all the taxes (federal income, federal payroll, state income, local property) probably reduce his take-home pay to about $90k, and after the mortgage, he's probably looking at $50k for everything else.

In order to afford his extremely expensive yet modest house that is worth a million dollars, as well as put probably five kids through a school system that is funded by high property taxes and then college, my guess is that he is going to be working for the next 30 years, end up earning $300k a year or more by the peak of his career, and retire with several million dollars in assets. He's going to bump up against the AMT and be ineligible to contribute to an IRA.

This friend of mine is just trying to live a relatively normal life and do right by his kids. But the cost of living in the area that he has chosen to inhabit requires that he basically become a multi-millionaire just to get by. Is he greedy?

[Greg]

This friend of mine is just trying to live a relatively normal life and do right by his kids. But the cost of living in the area that he has chosen to inhabit requires that he basically become a multi-millionaire just to get by. Is he greedy?

Yes. *sinister laugh, then I run away so you can't punch me*

[jafs]

Well, the definition of greed is certainly subjective.

A few million in assets sounds like a lot to me - more than we'll ever have or need.  And we live very well on much less than that.

So greed is relative? A few million sounds greedy to you because you have less; is $50,000 greedy to someone who has nothing?

The reason why I and others probably seem obsessed with this is that you and others like rickb seem to want to focus your discussion of greed on the very very rich, yet your broad and relative arguments would seem to apply equally well to people much less rich--people like yourselves, and me, and probably everyone here.

The definition is subjective, as I've said numerous times, and different people will see it differently.

And, sure, there can be relative greed, as in somewhat excessive vs. extremely excessive.

I'm not going to keep responding to this question, because I think I've said it as well as I can, and there's not much point in rehashing it.  The big problem for me is the vast imbalance in wealth/income in our society, and I would prefer for it to be more balanced.  There's an interesting chart showing 3 things:  The distribution of wealth, what people think the distribution is, and what they would like for it to be.  It turns out that the distribution is more uneven than people think it is, and both are more uneven than people would like.

[jafs]

If you increased that to $50k per year (not including vacations), which might make more sense for a larger home, extra kids, college expenses, medical bills, etc, that could very well be needed of $1.3M saved up. A few million I would suggest is no where near greedy, considering normal costs of living versus my (and perhaps PS's) sparse living expenses.

And then of course we need to take into account how expenses are relative to location. I bought my house in a New Mexico suburb for a little under 100k. I have a colleague back in the bay area who bought a very similar house (same number of bedrooms and bathrooms, roughly same square footage, same design and layout, etc) at around the same time and his total out-the-door costs were about a million bucks including all the required repair work. He also wants a big family with lots of kids, like 5 or 6o or something. In order to afford the mortgage on that house and the expenses of running that household at bay area prices, he's going to need to climb the corporate ladder for the next 30 years. I'm guessing he makes about $150k a year right now. Remember that this is the bay area, so all the taxes (federal income, federal payroll, state income, local property) probably reduce his take-home pay to about $90k, and after the mortgage, he's probably looking at $50k for everything else.

In order to afford his extremely expensive yet modest house that is worth a million dollars, as well as put probably five kids through a school system that is funded by high property taxes and then college, my guess is that he is going to be working for the next 30 years, end up earning $300k a year or more by the peak of his career, and retire with several million dollars in assets. He's going to bump up against the AMT and be ineligible to contribute to an IRA.

This friend of mine is just trying to live a relatively normal life and do right by his kids. But the cost of living in the area that he has chosen to inhabit requires that he basically become a multi-millionaire just to get by. Is he greedy?

He's made a bad choice about where to live, I'd say.

Normal suggestions for how much your home payment should be relative to your income are something like 25-33%, and that payment is about 45% of his take-home income.

But I get your point about relative costs of living, and that it's much cheaper to live some places than others.

[WiseOne]

So jafs....I suppose it looks like everyone is ganging up on you, but I hope you're enjoying the exchange.

Let's say, for purposes of argument, that I'm greedy.  What is it about this that bothers you, and does this injure you directly?

Greedy is most certainly a relative term, and is also quite pejorative in most contexts.  Almost anyone on on the planet can be called greedy, except maybe for the homeless guys sleeping on the subway.  And even then you could call one of them greedy if they're taking up too many seats.  So I would like to understand your motives for using the term.

[Pointedstick]

Because it is so relative and personal a term, "greedy" is one of those things that we know when we see it. To some people, greed is noticed in those who are very wealthy or who are paid a very large amount of money. To others, greed is when members of the first group (or others) covet this money for themselves or their purposes. I would suggest that this very discussion is an excellent illustration of my earlier assertion that political disagreements are often ultimately irreconcilable due to the various parties starting from definitions of subjective terms for which there is no "correct" answer, and being led from their definitions to naturally opposed views that cannot be reconciled unless the people agree to change their definitions. In the context of this discussion, if you are not willing to change your personal definition of the word "greedy," then you are demonstrating the truth of my assertion!

[jafs]

I originally used it in the context of whether there's "enough to go around", and said that I liked Gandhi's formulation that there's "enough for all our need, but not for all our greed".

Then I was asked to define greed, and it's gone on from there.

Your individual greed may or may not injure me directly, depending on how it plays out.  But, I'm not only concerned with myself, and it bothers me that so much of the wealth/income in this country has been diverted to those at the top, at the expense of those at the bottom and middle.

I would say that the motive behind this is almost certainly greed by those at the top.

[MediumTex]

So jafs....I suppose it looks like everyone is ganging up on you, but I hope you're enjoying the exchange.

Let's say, for purposes of argument, that I'm greedy.  What is it about this that bothers you, and does this injure you directly?

Greedy is most certainly a relative term, and is also quite pejorative in most contexts.  Almost anyone on on the planet can be called greedy, except maybe for the homeless guys sleeping on the subway.  And even then you could call one of them greedy if they're taking up too many seats.  So I would like to understand your motives for using the term.

I suspect that he is just looking at the overall distribution of wealth in our society, and the way the government in recent decades seems committed to assisting with the continuation of this trend of the rich getting richer, even when their bad bets SHOULD make them poorer.

It's not unreasonable to look at the whole thing and say: "That's messed up."  And it is messed up.

What's really bizarre to me is the people who are paranoid about the government "taking over" some part of the private sector.  What seems far more common is for some part of the private sector to "take over" the government when it comes to their industry.

Look at how the financial industry is rolling along with the same government backstops after almost wrecking the U.S. economy TWICE since 2001.  If anything, it's more dangerous now than ever before because after 2008 there are fewer firms concentrating even more risk in the financial sector.

Look at how the insurance industry took the idea of health care reform and turned it into a mandate that everyone in the country buy their products, with government assistance where necessary.

Look at how the defense industry consistently persuades Congress to buy more guns and bombs, even though the U.S. spends VASTLY more money than any other country on "defense."  They really ought the change the Defense Department's name to the "Attack Department."

There are a zillion such examples of the U.S. having the best government that money can buy, which is great if you have a spot at the trough, but it kind of sucks if you are a regular person wondering why things are the way they are.

[jafs]

Because it is so relative and personal a term, "greedy" is one of those things that we know when we see it. To some people, greed is noticed in those who are very wealthy or who are paid a very large amount of money. To others, greed is when members of the first group (or others) covet this money for themselves or their purposes. I would suggest that this very discussion is an excellent illustration of my earlier assertion that political disagreements are often ultimately irreconcilable due to the various parties starting from definitions of subjective terms for which there is no "correct" answer, and being led from their definitions to naturally opposed views that cannot be reconciled unless the people agree to change their definitions. In the context of this discussion, if you are not willing to change your personal definition of the word "greedy," then you are demonstrating the truth of my assertion!

You could change yours if you like, right?

If we both have different definitions and neither one of us are willing to change them, then yes, we have a stalemate.

[MediumTex]

I originally used in the context of whether there's "enough to go around", and said that I liked Gandhi's formulation that there's "enough for all our need, but not for all our greed".

Then I was asked to define greed, and it's gone on from there.

Your individual greed may or may not injure me directly, depending on how it plays out.  But, I'm not only concerned with myself, and it bothers me that so much of the wealth/income in this country has been diverted to those at the top, at the expense of those at the bottom and middle.

I would say that the motive behind this is almost certainly greed by those at the top.

The counterpoint is that if Steve Jobs says that he created $10 billion in economic activity and kept $1 billion for himself, there is still $9 billion of new wealth that the rest of society benefits from.  If Jobs hadn't believed that he could keep a portion of the economic activity that he created, maybe he wouldn't have created it.

Warren Buffett is perhaps the best example of someone who meets all of the normal definitions of greedy, but who seems to enjoy engaging in economic activity that benefits U.S.-centric companies, many of which employ a lot of Americans.  Such greed has a way of making the whole country richer, even though the most obvious beneficiary is Buffett.

[MediumTex]

Because it is so relative and personal a term, "greedy" is one of those things that we know when we see it. To some people, greed is noticed in those who are very wealthy or who are paid a very large amount of money. To others, greed is when members of the first group (or others) covet this money for themselves or their purposes. I would suggest that this very discussion is an excellent illustration of my earlier assertion that political disagreements are often ultimately irreconcilable due to the various parties starting from definitions of subjective terms for which there is no "correct" answer, and being led from their definitions to naturally opposed views that cannot be reconciled unless the people agree to change their definitions. In the context of this discussion, if you are not willing to change your personal definition of the word "greedy," then you are demonstrating the truth of my assertion!

You could change yours if you like, right?

If we both have different definitions and neither one of us are willing to change them, then yes, we have a stalemate.

How about we just define "greedy" as a tacky desire of someone else to accumulate beyond what would be your own basic needs.

jafs doesn't seem to be proposing any kind of universal definition of greedy.  His concept of greed seems very jafs-centric.

Ultimately, I think that for most people greed is a word used to describe one's style, rather than the substance one's actions.  By this definition, a 12 year old Monopoly player might be called greedy, while Warren Buffett might be called a great American.

[Pointedstick]

If we both have different definitions and neither one of us are willing to change them, then yes, we have a stalemate.

Right, and that's how the world works. Nobody wants to change their definitions. And the reason why they don't is because they recognize that if they change theirs a bit, but their current political opponents don't, then they give up some ground and hand their political opponents a win.

In this example, if I agree to change my definition of "greedy" to include some of the people who earn a lot of money, and I start supporting some of your tax-hike ideas on these people, then I am helping you get what you want: a tax hike on the wealthy. But if you decline to change your definition of "greedy" to include some of the people who covet the great wealth of others, and therefore I get none of the policy changes that I want without your support, then I have helped you get some of what you want and received none of what I want in return. See the problem?

[MediumTex]

jafs, don't mistake our spirited engagement with you to mean we aren't glad you are here.

We tend to gang up on new members with different ideas simply because we're excited that some new ideas have been injected into the conversation.  Over time, the house logic here has a way of homogenizing the discussions (though certainly not always).

[Mountaineer]

This discussion of greed is interesting.  It seems there are several different presuppositions in play:

Equal outcomes in life is the preferable.

“I” am in the best position to judge what is fair and equal and the appropriate metrics to use for measurement.

Ones situation seems to focus on material “wealth” as being the most important metric.

Average is preferred over other situations.

Those outside average should be rewarded or penalized so they return to average.

It is not enough to be satisfied with ones own situation in life, one must be satisfied for others as well.

... Mountaineer

[jafs]

I originally used in the context of whether there's "enough to go around", and said that I liked Gandhi's formulation that there's "enough for all our need, but not for all our greed".

Then I was asked to define greed, and it's gone on from there.

Your individual greed may or may not injure me directly, depending on how it plays out.  But, I'm not only concerned with myself, and it bothers me that so much of the wealth/income in this country has been diverted to those at the top, at the expense of those at the bottom and middle.

I would say that the motive behind this is almost certainly greed by those at the top.

The counterpoint is that if Steve Jobs says that he created $10 billion in economic activity and kept $1 billion for himself, there is still $9 billion of new wealth that the rest of society benefits from.  If Jobs hadn't believed that he could keep a portion of the economic activity that he created, maybe he wouldn't have created it.

Warren Buffett is perhaps the best example of someone who meets all of the normal definitions of greedy, but who seems to enjoy engaging in economic activity that benefits U.S.-centric companies, many of which employ a lot of Americans.  Such greed has a way of making the whole country richer, even though the most obvious beneficiary is Buffett.

Well, the first thing is we'd need more than his word for that $10 billion.

And, generally speaking, I find that it's the spending by those at the bottom and middle that is the real engine for economic activity and growth, and that also benefits those at the top.  Without customers and employees at all levels, no business can succeed.

There's been some sort of idealization of those at the top, combined with some negative view of those at the bottom, at play.

[jafs]

Because it is so relative and personal a term, "greedy" is one of those things that we know when we see it. To some people, greed is noticed in those who are very wealthy or who are paid a very large amount of money. To others, greed is when members of the first group (or others) covet this money for themselves or their purposes. I would suggest that this very discussion is an excellent illustration of my earlier assertion that political disagreements are often ultimately irreconcilable due to the various parties starting from definitions of subjective terms for which there is no "correct" answer, and being led from their definitions to naturally opposed views that cannot be reconciled unless the people agree to change their definitions. In the context of this discussion, if you are not willing to change your personal definition of the word "greedy," then you are demonstrating the truth of my assertion!

You could change yours if you like, right?

If we both have different definitions and neither one of us are willing to change them, then yes, we have a stalemate.

How about we just define "greedy" as a tacky desire of someone else to accumulate beyond what would be your own basic needs.

jafs doesn't seem to be proposing any kind of universal definition of greedy.  His concept of greed seems very jafs-centric.

Ultimately, I think that for most people greed is a word used to describe one's style, rather than the substance one's actions.  By this definition, a 12 year old Monopoly player might be called greedy, while Warren Buffett might be called a great American.

I wouldn't define it that way, because I don't think everybody has to live at the same level, or only meet their basic needs.  In my view, having enough to meet basic needs and a certain amount of wants is perfectly reasonable.

We should remember that this started as a question of whether or not the billionaire is harmed by not being able to buy that second or third yacht.

[jafs]

If we both have different definitions and neither one of us are willing to change them, then yes, we have a stalemate.

Right, and that's how the world works. Nobody wants to change their definitions. And the reason why they don't is because they recognize that if they change theirs a bit, but their current political opponents don't, then they give up some ground and hand their political opponents a win.

In this example, if I agree to change my definition of "greedy" to include some of the people who earn a lot of money, and I start supporting some of your tax-hike ideas on these people, then I am helping you get what you want: a tax hike on the wealthy. But if you decline to change your definition of "greedy" to include some of the people who covet the great wealth of others, and therefore I get none of the policy changes that I want without your support, then I have helped you get some of what you want and received none of what I want in return. See the problem?

I want to change the direction of wealth accumulating at the top to the detriment of those at the bottom and middle.

What do you want?

[jafs]

jafs, don't mistake our spirited engagement with you to mean we aren't glad you are here.

We tend to gang up on new members with different ideas simply because we're excited that some new ideas have been injected into the conversation.  Over time, the house logic here has a way of homogenizing the discussions (though certainly not always).

Thanks - it's good to be welcome.

It seems mostly friendly, and I like discussing and debating things in a friendly atmosphere - helps keep the Alzheimer's away, for one thing 

[jafs]

This discussion of greed is interesting.  It seems there are several different presuppositions in play:

Equal outcomes in life is the preferable.

“I” am in the best position to judge what is fair and equal and the appropriate metrics to use for measurement.

Ones situation seems to focus on material “wealth” as being the most important metric.

Average is preferred over other situations.

Those outside average should be rewarded or penalized so they return to average.

It is not enough to be satisfied with ones own situation in life, one must be satisfied for others as well.

... Mountaineer

Thanks - I'm glad it's interesting.

But I would disagree with your characterization of my views almost straight down the line there.

I never said there should be equal outcomes.
Or that material wealth is the most important thing.
Or that average is the best, and that everything should be equalized to that.

We all do create/maintain our views of things like fairness and how to measure that.  And, yes, I care about other people as well as myself.  The fact that I'm doing fine doesn't mean that everybody is, or that I shouldn't care about them.

[MediumTex]

jafs, don't mistake our spirited engagement with you to mean we aren't glad you are here.

We tend to gang up on new members with different ideas simply because we're excited that some new ideas have been injected into the conversation.  Over time, the house logic here has a way of homogenizing the discussions (though certainly not always).

Thanks - it's good to be welcome.

It seems mostly friendly, and I like discussing and debating things in a friendly atmosphere - helps keep the Alzheimer's away, for one thing 

Friendly is the only real rule here.

As long as it stays friendly, discussions of almost anything are welcome.

***

There is no question about whether the rich have gotten richer while the poor and middle class have watched with envy for a LONG time in this country.  The question is what to do about that.  Progressive taxation is the most obvious answer to addressing that inequity, but progressive taxation has gotten a bad name because the rich have done such a good job of buying themselves a friendly Congress through manipulation of the campaign finance laws.

You can debate the merits of progressive tax structures (i.e., you pay a higher rate as your income increases), but this country had one for many decades and things seemed to work well enough.  When we started going with a more flat rate structure in the 1980s, two things started happening: (i) the federal budget deficits and national debt started rising dramatically, and (ii) the gap between the rich and the rest of the country began to widen dramatically.  IMHO, those two developments were not good for the country, but I might just be saying that because I'm not rich myself. 

What has clearly been happening, though, is the government's red ink has been almost solely the result of not taxing the wealthy at historical levels, which is another argument against the idea that this country is somehow moving toward an anti-wealth socialist-type of system--it's actually quite the opposite.  Note that as a percentage of GDP, government spending is not significantly different today from historical post-WW2 levels.  You might say that the U.S. government today really is the best that money can buy when measured by the way the government takes special care of the rich people--i.e., they get better and better treatment, while paying less and less taxes as a percentage of their income and assets.

Increasingly, our entire society is moving toward a "pay to play" model, and this shift includes toll roads, private schools, private military contractors, private security services, private health insurance, individual account retirement plans, and "consumer-oriented" health care.  Against this backdrop, it shouldn't be surprising that traditional democracy has given way to "money democracy" where dollars have gradually replaced votes as the most desirable political currency.  To paraphrase the great Bud Bundy: "Would I rather have votes or money?  That's easy.  I would rather have money.  I can always rent votes."

Rather than lament this shift, it might be better to just start adapting one's political activities to this new reality.  For example, if you want your elected representative to hear your voice, donate to his campaign.  That's how the rich do it.  The kind of democracy we are taught about in school is basically dead, and the Supreme Court seems intent on making sure that it stays dead with their recent campaign finance decisions.

It actually makes perfect sense that a political novice billionaire might think he would be the perfect person to lead our government.  In a system where money is the only thing that really matters, a person skilled at making and managing money might be the perfect person for the top spot.  Note how Trump has casually brushed aside all of the typical measures of patriotism as if they were all obsolete without people complaining too much (remember how he trivialized McCain's POW experience and it didn't seem to hurt him at all).  Past indicators of political gravitas like military service, public service, and political leadership seem to gradually be giving way to simply which candidate has the most money, and candidates with personal fortunes naturally benefit from such a shift.

Think about some of our recent Presidents and presidential candidates: Mitt Romney: super rich.  Hillary Clinton: very rich.  George W. Bush: very rich.  John Kerry: super rich.  Donald Trump: super rich.  When you look back at guys like Reagan, Carter, Ford and Nixon, you didn't see the common denominator of vast personal wealth because money didn't play near the role in politics then that it does today.

[MediumTex]

personally, i would define greed as accumulating wealth with full knowledge of, and complete disregard for, the harm your methods of doing so cause..  (This does leave a lot of potential Grey area) somebody making a living by way of bribery, corruption or crime is greedy. the corporate executive with the absurdly large salary "maybe greedy - maybe not", you would have to know what are they guilty of and what they are aware of, then sort out if there profiting involved a direct personal disregard for harm or if the disregard for harm is institutional (the system they operate in is corrupt and harmful tainting all its actors) if somebody can make a few billion honest dollars without doing harm good for them... i wouldn't feel society was owed any more than a modest (libertarian approved) taxation on that amount.
if you gains are ill gotten then maybe all that money should go to your victims and you should go to jail.
and if the system you operate in is corrupt then (blue sky idea follows) maybe your tax rate should match your rate of corruption and harm, and the skies the limit so the most corrupt areas of the economy can foot the bill for the mess they make of the country..

How about this: a coal executive who mines as much coal as he can while following applicable legal requirements and being responsive to the communities in which his mines operate is not what I think of as greedy.  When, however, the same guy starts cutting corners on safety and knowingly leaving behind environmental messes for someone else to clean up, that looks more like greed.

Maybe greed should be measured by what you are willing to do to obtain one more dollar.  The most egregious examples of what we think of as "greed" always seem to have corresponding harms borne by others.

To answer the question about whether a zillionaire is harmed by not being able to buy a second or third yacht, I would say that he is clearly harmed because the right to use and enjoy his property is being encumbered, and the harm is not just to him, but also to the manufacturers of the second and third yachts and to the people who would like to crew and maintain those yachts once they are built.

I think that what Americans are more troubled by is the lying, cheating and buying of political influence among the rich.  I don't think that buying yachts bothers people that much.

i agree..... the coal miner is a great example of the concept.
i don't think buying yachts bothers anyone but the brain washed, and the economically illiterate.. who think one guy having two yachts, or a bigger yacht, somehow hurts them or deprives the poor of something they need... sadly i think this type of brainwashing and illiteracy has become more common in America lately..