It's quite a simple concept, and the real estate boom and bust is perfect proof. Dollars are being sucked out of the middle class up into the rich.

Whether it is through tricky sucker mortgages, a constant bombardment of advertising, or lawyers suing companies that provides consumer goods, the rich have found ways to bilk the poor.

Additionally, you may have noticed that low taxes and economic uncertainties are leading a lot of highly educated professionals to stay employed just a few years longer, thus, depriving young people fresh out of college jobs.

We do need to encourage well-to-do old farts, like college profs making 100k+ year, to retire and make way for the unemployed, highly indebted young people that fueled their outrageous salaries.

If we slow down the wealth extraction machine of the rich, the wealth creation engine of the middle class can finally get enough fuel to roar back to life.

"... lawyers suing companies that provides consumer goods ..." doesn't seem to fit the model you present. Sounds more like the rich pursuing the rich; could you explain?

Also, Madai, could you tone it down on the "old farts" stuff? Maybe you could use a phrase like "revered elders".

And as for me, I figure I'm just a few years away from officially being a 'geezer'. When I was a teenager, we considered any man over the age of 55 to be a geezer.

Some of those old college professors are just 'coasting', and should retire. But some of them are highly productive, both in terms of research and teaching, and they should not retire. I knew a married couple who were both economics professors at Colorado State University. Both were in their late fifties/early sixties when I was taking classes from them. The male half of the couple should have retired; he was coasting. In a Ph.D. level seminar on economic development, he spent most of the time relating anecdotes to the students about famous people he had met during the course of his career. His wife, however, was another story: brilliant, driven, and an absolutely amazing lecturer. Students had a hard time keeping up with her.

Really needs to be looked at on a case-by-case basis.

that they couldn't continue to support a largely non-productive landed nobility, so they taxed it down to size. That realization is coming to us, albeit slowly.

Long live the Empire!

Madai:

It's quite a simple concept, and the real estate boom and bust is perfect proof. Dollars are being sucked out of the middle class up into the rich.

Whether it is through tricky sucker mortgages, a constant bombardment of advertising, or lawyers suing companies that provides consumer goods, the rich have found ways to bilk the poor.

Not to let rich swindlers off the hook entirely, but I think the essence of the real estate boom and bust was middle class folks who tried to become mini real estate moguls, flipping properties and such, buying houses they never intended to live in, watching the market boom and dreaming of their cottage on Antigua, someday.

And, yes there was a lot of predatory lending, but there were also millions of people who bought houses that any sensible person would have known that they could not afford. They were offered the stupid loans and they snatched them up like the greedy little social climbers they were. Then they defaulted on those loans and you get what we've got now.

My point? Don't blame only the rich. There was plenty of greed to go around from the middle class on up.

BTW, I'm not rich. Hell, I'm barely middle class.

It's quite a simple concept, and the real estate boom and bust is perfect proof. Dollars are being sucked out of the middle class up into the rich.

The real estate boom was not sucked up by the rich from the middle class. A better analogy would be that the poor and middle class suck down money from the rich and burned it. It was the poor and middle class that bought homes they could not afford, which artificially inflated the market for the middle class. All of this was encouraged by the government of both parties.

Whether it is through tricky sucker mortgages, a constant bombardment of advertising, or lawyers suing companies that provides consumer goods, the rich have found ways to bilk the poor.

There were very few tricky sucker mortgages. Before the boom when you has to have 15-20% down for a home loan it was considered racist and too high a barrier for the poor to meet, now you complain it was predatory. It doesn’t take too much brain power to figure out that a welder and secretary can’t afford a $300K home. The lender and borrower both knew the terms. While there was some fraud, which should be prosecuted, fraud alone was nowhere near enough to collapse the economy.

It was also very risky for many families to swap unsecured debt (credit cards) for a secured debt (2nd mortgage). Then there are all the house flippers- buy a home with a ARM fix it up and then sell it in a 6-18 months before the adjustment kicks in. Then there are all the people who took 2nd or 3rd mortgages to add bedrooms, 2nd floors, finished basements, etc. No one was bilked. Everyone benefited from this arrangement, cheap loans secured by rising home prices; it was a win/win. Top to bottom everyone over leveraged; the home owner, the bank, wall st, and the investor.

Additionally, you may have noticed that low taxes and economic uncertainties are leading a lot of highly educated professionals to stay employed just a few years longer, thus, depriving young people fresh out of college jobs.

That is part of it, but a very small part. No one is hiring because of the economic uncertainty. With all the bills in Congress (cap and trade, health care), Bush’s tax cuts about to expire, and the various states raising taxes, in addition to a scheduled minimum wage increase employers are not about to hire new people. Obama’s spread the wealth sounds and looks good on paper but the more money you steal from the producers the less money they have to create jobs. If an employer knows his taxes will go up by 15-30% he isn’t going to hire new people, current employees will not get raises, hopefully he will not lay anyone off.

If we slow down the wealth extraction machine of the rich, the wealth creation engine of the middle class can finally get enough fuel to roar back to life.

I hate to break this to you, but most of the middle class doesn’t create wealth and the poor destroy wealth. Exactly how does a school teacher, police officer, store clerk, secretary, etc create wealth? Entrepreneurs, investors, business owners, inventors, etc create wealth.

When you reached job creation as a topic, you went completely off the tracks! The only people who create jobs are consumers. What makes you imagine that a manufacturer with unsalable inventory is going to hire people to make more product to increase that inventory? Have you seen all the gigantic parking lots near the ports and distribution centers? They are filled with unsold, and unsalable, new cars. Reality trumps your desire to present the rich as the wellspring of all that is good in this country.

Isn't she, uh, part of a 'largely non-productive landed nobility'??

And she's darned expensive, too!

Maybe the Brits should say 'Off with her head'!

Gunsmoke: most of the middle class doesn’t create wealth and the poor destroy wealth. Exactly how does a school teacher, police officer, store clerk, secretary, etc create wealth? Entrepreneurs, investors, business owners, inventors, etc create wealth.

LeRoy: Garsh yes!! Darned tootin! Who needs all this useless edumucation anyhoo? Ain't never done nobody a lick of good! I betcha all them enterpreppienuer fellers didn't need no algibra or calcullus or chemstry! Them fellers are just BORN natcherally smart and don't need no books to larn from! All that calullus noncents is a buncha hooey anyway! Them dudes teach there students about stupid stuff like instaneous velosity! Ain't no sucha thing! Nuthin' can git anywheres in a instant!! Just plane ol' common cents oughtta tell someone that! And THEN theirs all this Darwan ape-man monkee bizness noncents they's go around teachin'! Tellin' are kids that they came from monkees or pooped outta some camels behind, or whatever there latest story is! Rubbish! Kids thinkin' there nuthin more than monkees is why's they's humpin each other like bunnies, right their in school, in front of God and everybody! Its sick, is what it is! That genuis Alfred Einsteen feller didn't need to think he came from a camel to come up with all his Laws of Gravity! They oughtter start teachin are kids REAL sceince or else git rid of schhools completly! Them smart investers can invent stuff without any kind of schoollin at all, I betcha!

Y'er right about that monkee stuff! Used to be when I was a yungun, we new that kids came from under cabbage leeves. It workd good to. Never saw nobody humpin a cabbage!!

Well, I bet if you looked hard enough, on the Internet, you could find it. Might not even be that hard, actually. People will hump just about anything that moves, and even stuff that doesn't move. Like cabbages.

Long live the Empire.

"keep banging the rocks together". All well and good for that level, but most of us have moved well beyond that point. Please do us the favor of trying to keep up, or at least make it look like you're doing so.

The poor do not destroy wealth, unless individuals amongst them commit vandalism, which moves those individuals into the category of criminals. Are you suggesting that the poor are by nature criminals?

Almost all of the money that they earn or receive goes for survival, in the form of food, clothing, shelter, and medication; this goes to providers of same, and recirculates into the economy. No wealth is destroyed save through waste and inefficiency. Precious little is left for recreation, and even that is recirculated just the same.

Gunsmoke: "Exactly how does a school teacher, police officer, store clerk, secretary, etc create wealth?"

It could be argued that no particular profession directly creates wealth, but then that was never really their responsibility now, was it? What the professions are responsible for is adding value at the point where their exertions are applied (or limiting the loss of value due to mishaps or malice) during the processes of creating or delivering wealth.

Executives, investors, business owners and entrepreneurs do little to add value during the process of wealth creation; their influence is mostly limited to putting the necessary resources in place (provided that they are willing to do so), a task for which they seem to be rather overpaid.

The destruction of wealth does occur, but the perpetrators are scarcely to found amongst the poor or middle class. Much wealth was destroyed (or scattered beyond recovery) when Enron was deliberately collapsed by its executives. Much also has been lost when the high rollers in the credit and investment markets ignored sound principles of debt management and over-leveraged themselves and their institutions.

They were the ones who ought to have known better. And they were the ones that failed, not the rest of us.

One last thought: some time ago, when the Federal Government was shopping for a new SEC director, one commentator said that the candidate should have "go to hell money": i.e., should have enough net worth to tell the entities regulated by the SEC to "go to hell" if they tried to threaten his career, post-government. Which should, ostensably, keep the SEC working for the public interest.

But when individuals operating entirely in their self-interest have enough wealth to be able to say "go to hell" to recognized and sound principles of investment and debt management,... well it certainly does not work very well for the rest of us. Nor did it.

Miscreant Mutt

or feels unduly insulted, that last message was directed to Gunsmoke, and his post.

Miscreant Mutt.

I've never understood that, actually.

I wouldn't mind visiting merry olde England some day. But it wouldn't be to gaze (worshipfully?) at the Queen.