Obama on Self-Made Men and Women

President Obama took on entrepreneurs the other day, boldly claiming the self-made man is an illusion to an audience in Roanoke, Virginia.

I can’t imagine why he did it. Was it gratuitously insulting? Of course. Did it sound like a school yard taunt? No doubt. Was it unpresidential? Absolutely. Was it a gaffe? I’m not sure. He seemed to be speaking from the heart. I am sure about this: The president’s remarks reflect bad logic, bad philosophy and most important (for me) bad economics.

You’re so vain

Since the Obama apologists are claiming that the president is being quoted out of context, here is the full text of how he led into the subject:

If you’ve been successful, you didn’t get there on your own. You didn’t get there on your own. I’m always struck by people who think, well, it must be ’cause I was just so smart. There are a lot of smart people out there. It must be because I worked harder than everybody else. Let me tell you something: There are a whole bunch of hardworking people out there.

If you don’t know what that means, you must be incredibly dense. It gets worse. The president continued:

If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business, you didn’t build that. Somebody else made that happen.

There is no way to read any of this and not be acutely aware of what the president is trying to do. Whenever anyone on the left tells you that you didn’t earn your own success, that you had help from others — you know what’s coming next…If you didn’t earn what you have, you don’t deserve it! And if you don’t deserve what you have, it follows that…

Well, nothing actually follows from that. Suppose I’m rooting around in the woods and stumble upon a valuable diamond. I didn’t put forth any physical or mental effort. The discovery is pure, blind luck. So you can say, in a sense, I don’t deserve it. But you don’t deserve it either. It doesn’t follow from the fact that I was the beneficiary of luck that others are justified from taking the diamond from me.

If the roll of the dice or the spin of the roulette wheel favors me rather than you, I can’t claim that I “deserve” my winnings or that you “deserve” your losses. But it doesn’t follow from those facts that you are entitled to what I have won.

As for Philosophy, Dylan Matthews (at Ezra Klein) surveys what various thinkers have to say about who deserves what. Here is what he leaves out: Suppose I am standing behind a Rawlsian veil of ignorance and I can dictate the rules that govern the world I am about to be born into. What do I want those rules to be? Well, if I am a utility maximizer, I want people to get their marginal product. That’s the only way we are going to maximize output. And that’s the only way a randomly selected person will achieve maximum expected utility. What does it mean for people to get their marginal product? Read on.

For more than 200 years economists have been studying the distribution of income. Granted that what each of us does affects other people, what determines how much income any one of us receives? The economist’s answer is straightforward. In a capitalist system, each one of us tends to receive an amount equal to our marginal contribution to nation’s output of goods and services. That is, each of us tends to receive an income equal to our contribution to generating national income.

In plain English: people tend to get the value of what they produce.

There is logic to how the economic system functions. Incomes are not distributed randomly. For the most part, they are not the result of misfortune or luck. They are very much affected by the attributes the president derides: smart thinking and hard work.

Some of President Obama’s defenders have claimed that the critics are reading too much into his speech. That all that’s going on here is the classic conflict between individualism and social needs. But there are degrees of disagreement. Obama’s articulation of the issue is an extreme collectivist point of view. It is remarkable precisely because it is so very far outside the mainstream of contemporary thought.

That’s why so many people are outraged and why there is a sudden surge of gallows humor. On Facebook and in other social media, people are sharing examples of inventors and entrepreneurs “who didn’t build it.”

By way of contrast, here is Ayn Rand’s paean to the entrepreneur:

America’s abundance was created not by public sacrifices to ‘the common good,’ but by the productive genius of free men who pursued their own personal interests and the making of their own private fortunes. They did not starve the people to pay for America’s industrialization. They gave the people better jobs, higher wages and cheaper goods with every new machine they invented, with every scientific discovery or technological advance—and thus the whole country was moving forward and profiting, not suffering, every step of the way.

And here is her warning:

Every movement that seeks to enslave a country, every dictatorship or potential dictatorship, needs some minority group as a scapegoat which it can blame for the nation’s troubles and use as a justification of its own demands for dictatorial powers. In Soviet Russia, the scapegoat was the bourgeoisie; in Nazi Germany, it was the Jewish people; in America, it is the businessmen.

Comments (32)

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  1. Ken says:

    Great post. Can’t imagine why Obama said these things, but I’m sure he believes them.

  2. Vicki says:

    I like the Ayn Rand quotes.

  3. Brant Mittler says:

    Or in America, if you’re a business person or a big insurance company, it’s the doctors and the teachers.

  4. Alex says:

    President Obama’s campaign has claimed that “that” refers to roads and brideges. Problem? “That” is singular, while roads and bridges is plural. So either the President was expressing a collectivist viewpoint, or he fails at basic grammar.

  5. Robert A. Hall says:

    Part and parcel of Obama’s appeal to the “takers” who are entitled to what the “makers” produce. That is, if the “takes” are wise enough to band together to elect people like him who will punish the “makers,” to pay for the entitlements. Of course, that leads to Greece and collapse in the long run, but to electoral victory in the short run. European progressive politicians for 30 years have said, “To hell with the future, we need to buy votes now with borrowed money. Let the future take care of itself.” Now the future is here, and threatens to spread poverty throughout the developed world, and multiply the suffering in the third world exponentially if (when!) the Euro and the EC crashes and burns. US politicians, including many who would call themselves “conservatives,” have done the same, but because of the size of the economy, we can still postpone the “future,” for a few years. As long as Obama gets reelected in November, he doesn’t care about the disaster his policies are creating down the road. He probably doesn’t even understand it, despite all the evidence. But it is coming, as sure as death and tax increases.
    I will link to this from my Old Jarhead blog.

    Robert A. Hall
    Author: The Coming Collapse of the American Republic
    All royalties go to help wounded veterans
    For a free PDF of my book, write tartanmarine(at)gmail.com

  6. David Lenihan says:

    As important as the President’s remarks were, one should listen carefully to the “yeahs” and “go get em” of the audience. He was truly pumped up by the reaction of the crowd to his message of ‘success is made on the backs of others’ message, along with the ‘it’s because of government that you are successful’ message. Re-distributionists rule in the new America!

  7. Peter Ferrara says:

    This is the best discussion of this Obama quote I have seen. The basic problem is that the President is a self-professed Marxist and communist. Read what he says about himself in his own published books. His deceased father who the President deeply admires and loves was an openly avowed communist who was too far left even for the government of Kenya and so lost his job because of his extremist ideology. The question is will even 40% of America vote for well articulated Marxism? If the Marxist/communist vote in our nation is that high, America won’t survive as the world leading hyperpower it has been with world leading economic growth and prosperity.

  8. Rich says:

    Or in America, if you’re a lawyer, it’s everybody else.

  9. Studebaker says:

    I can’t imagine why he did it.

    If I were to guess, I’d suggest Obama said it to create resentment by dividing the audience into haves and have-nots. He could then placate the resentment saying: 1) It’s not their fault they are less successful than some others and; 2) those who have been (unjustly) enriched by the benevolence of mentors, teachers, good genes and exceptional parental upbringing should share some of their (unearned) success. It’s hard to describe that as anything other than class warfare.

  10. Mark Pauly says:

    This is all silly. Of course outcomes are better with a mix of public inputs and private efforts than if either were set at zero. But the real question is what will be the most effective (per dollar) at the margin given where we are today? Would more roads and more government investment in the internet add more per dollar than removing (or not adding) disincentives to private effort? The lawyerly world has a hard time with joint production because to them it is always 100% or zero all the time.

  11. N says:

    Your “blind luck” diamond find analogy doesn’t quite work, since Obama’s point was not that successful people were helped by blind luck. His point was that successful people were helped by societal programs such as schooling (both for the successful person and the employees who contributed to their success), commercial infrastructure (e.g. roads), etc. So you are right that no one else is entitled to a share of someone’s “blind luck” discovery. But since societal programs contributed to the success of successful people, societal programs have a legitimate claim to a share of the profits. Now, that doesn’t answer the question of how big a share societal programs are entitled to, but it’s a start…

  12. Alexis says:

    I agree with @N that societal programs such as schooling, infrastructure, etc. contribute greatly to someone’s success and thus I don’t necessarily have a problem with funding these programs. However, I don’t agree with Obama that because someone took advantage of a “great teacher” in their lives that they should have to pay so much more than individuals who had the same opportunities, but didn’t take advantage of them. I am getting quite tired of hearing this administration demonize those individuals who made use of every opportunity available to them and who thus became successful. Success is NOT a bad thing.

  13. david says:

    Ok, so if we assume some basic things are equal, then a person’s income is due to hard work. But are any of those basic things equal? Not at all.

    Does a taxi driver in New York City make more (in real dollars) than a taxi driver in India because he’s a better taxi driver? Of course not. Does a taxi driver in Norway make more than a taxi driver in NYC because he’s a better taxi driver? Of course not.

    I read a study somewhere that 90% of individual income has nothing to do with hard work, ingenuity, etc. People in poor countries are MUCH more entrepreneurial than those in rich countries and LOL at “they did not starve the people to pay for America’s industrialization.” A) We had to kill a whole lot of Native Americans to make any of this possible. B) We murdered plenty of foreigners for it. C) In 1880, rougly in the middle of the industrial revolution, America was the most protectionist country in the world. We had higher tarriffs than China does now. Britain’s industrial revolution shares a similar story. So, this great boom of our economy didn’t come because our textile entrepreneurs were just somehow more brilliant than their British counterparts. D) Higher wages and better working conditions didn’t come about until people organized and fought for them. It had nothing to do with the good graces of entrepreneurs. America’s abundance–like most everyone else’s–was created by protectionism, immigration control, and warring for markets.

    Since the 70s, real wages have been stagnant or falling, while profits have been rising. In other words, the rich have gotten richer while the poor have gotten poorer. That has nothing to do with the fact that the rich are working harder and being more ingenius–most of that is because of labor dumping and financial speculation (which isn’t investment or development). Those are legal options created by governments. Mitt Romney quite literally would not have made a dime doing what he did were it not for the way in which our government regulated (and didn’t regulate) trade, immigration, and financial instruments.

    Another recent trend is the decrease in time that stocks are held. Business decisions are becoming more-and-more short term ones, especially when combined with the recent (last 30 years) trend in providing managers with stock options. That has incentivized short term gains at the expense of long term investment, so even if investors are getting what value they provide (which they’re not), that is only being done through long-term sacrifices. Not exactly “value” if you ask me.

    If you were to find a giant diamond on the ground, indeed you had nothing to do with making that diamond and they only way in which you would be able to make money off of that diamond is if the government protected your right to property.

    The only reason any of the “you didn’t build that” people were able to make money off their inventions is because government grants a monopoly on those things (called a patent, neo-liberals forget what that actually is). For much of the beginning of our industrial revolution, our government would grant Americans patents for inventions that were actually invented by foreigners.

    PCs were only made possible because of government research beginning in the 60s. The airplane (which the Wright brothers didn’t actually ever have) didn’t become a consumer product until governments funded research and engineering.

    You’ll also notice that all of the valiant inventor-entrepreneurs come from before the 80s. That isn’t a coincidence either, and has much to do with investment financing for short-term profits at the expense of actually building a company. You’ll remember that Steve Jobs was fired from Apple…

    The simple fact is that we wouldn’t be anywhere near as prosperous were it not for government. The free-est markets in the world can be found in Latin America and Sub-saharan Africa. That isn’t a coincidence (The Heritage Foundation’s statistics are bogus–their #2 freest market is Singapore, where 20% of GDP comes from nationalized industries).

    While Obama’s wording needs a little work (he should hire me as his speechwriter), the basic theme is completely truthful, and ignorance of that fact will get you nowhere. But don’t take my word for it:

    “I personally think that society is responsible for a very significant percentage of what I’ve earned. If you stick me down in the middle of Bangladesh or Peru or someplace, you’ll find out how much this talent is going to produce in the wrong kind of soil: I will be struggling 30 years later. I work in a market system that happens to reward what I do very well–disproportionately well.”

    -Warren Buffet

  14. Robert says:

    So @Peter Ferrara, should the president NOT love his father because he was a communist? Should I not love my own parents because they’re republicans?

  15. Jennie Fiedler says:

    I don’t think I buy what economists have to say about income. People who do incredibly valuable work (like teachers, cops, firemen) make very little in comparison to what they contribute. Corporations earn an incredible amount of income but give back very little in relation to what they use. This recent economic crash was due to a lot of law breaking and bending taking place on Wall Street, and it being rewarded with huge bonus payouts of tax money instead of prison sentences. From what I can see, nobody can be anybody in this country without a huge bankroll, the most prominent arena being the political one. Small businesses are constantly edged out by mega nultinational corporations that can buy their preferential legistlation which allows them to offshore ant outsource at will. Smart thinking and hard work don’t get anyone very far in this country anymore. If you want to be a millionaire or a billionaire become a corporate lackey and backstab your way up the ladder or become a politician and do the same. Sad, sad state of affairs.

  16. Stan Ingman says:

    John,

    Perhaps the one side anti govt. noise put in such simple terms we see from your colleagues, made him try to restore some balance. Nothing instulting as far as I could see. Like the silly attack of Hilary…when she said it takes a village to raise a child.

    Stan

  17. Ralph F. Weber, AEP, CLU, REBC says:

    At the risk of sounding like I need to get a tin foil hat, have you considered that in his constant lashing out at the Catholics, then Bush, then rich people, then business owners, etc etc, he is trying to find a “bad guy” that sticks? If he can get people to identify a common enemy to blame, he feels he can gain power.
    Wait…is there an example in history where that has been done before?

  18. david says:

    If that’s a Hitler reference, he isn’t using fabricated conspiracies to “lash out” at those groups, so your point is moot.

  19. Patrick says:

    ‘You didn’t build that’ But I paid more than my share of taxes that did build ‘that’. Sure the successful benefitted from the ‘free enterprise’ and educational system that was crafted so they could thrive, but they also pay the taxes that build the system for the next generation.
    America has arguably the best legal, healthcare, environmental, and healthcare on the planet, but it’s seriously making us uncompetitive in the workforce. A person earning $20/hour, struggles to feed their family in the US, loses their job to a person overseas, who is absolutley rich on $10/hour, simply because their cost of living is so much lower than the US.
    How much longer can we continue to have such a high cost of living? Be the worlds policeman? Subsidize the R&D for healthcare technology and pharmaceuticals? Having better EPA protection and moving industry to China, with horrible EPA protection, doesn’t help the planet – it worsens it.

  20. GracieZG says:

    I think we are seeing the communist mind thinking out loud. If you really, truly want to understand the Marxist/Communist mentality, and get a “birds-eye view” of what it looks like and sounds like and feels like as it sweeps a country, manipulates minds into group think, curtails all freedom, and instills terror, I highly recommend the book “Wild Swans, Three Daughters of China” by Jung Chang about three generations in China as the communists took over. I think this book should be required reading in these times. We take freedom for granted. This is what it is like when it is gone. This book will also give insight into the operating basis of North Korea. All for the glory of the state, and particularly for the glory of the leaders.

  21. Ralph F. Weber, AEP, CLU, REBC says:

    OMG, this is the first time I saw the song pairing. Perfect, I love it.
    @Gracie…page 79…Fascism not Marxism, otherwise right on

  22. Eric says:

    It’s disappointing to see John regurgitating Republican talking points here, but I guess that goes with the territory (NCPA=non-partisan, really?). Obama was responding to the absurd Randian idea that the wealthy became so only because of their natural ability and efforts, without considering the societal structures that allowed them to obtain their wealth. It’s not about punishing the rich or socialism or class warfare (or other silly right-wing talking points), but rather, the concept of paying it forward, so that future generations may have the same opportunities to become wealthy and successful innovators.

    If Mitt Romney really believes that he did everything on his own, then let him say so, and we can have a real discussion about that. Instead, we have him running a new ad with a small business owner (who incidentally has taken a lot of government money) jousting with a straw man.

    Context matters, but the perpetual outrage machine is more interested in spinning candidates’ statements to serve their own political interests. I could easily take Mitt Romney’s comments about liking to fire people or lacking concern about the very poor as evidence of his disconnect and lack of empathy for the interests of working Americans. However, I understand that he had larger points that he was trying to express, and while I don’t necessarily agree with them, I’m not going to dwell on silly gaffes and read underlying ideologies into them.

  23. david says:

    @Patrick, we have none of those things.

    @Gracie, there is a book that IS often required reading called 1984. It’s the best blueprint for fascism that’s ever been written–even the Russians think so.

    But don’t forget that it was written by a socialist. And groupthink in our society seems to come from party allegiance, not Marxism, as exemplified by contemporary Republicans opposing an individual mandate even though it was originally their idea or liberals in the 90s voting for Clinton even though he was nothing like a true liberal.

    @Eric, all good points.

  24. wanda j. jones says:

    John and All. (Mr Buffet; thanks for your wonderful historical summary.)

    If all it took to be successful was good teaching and a lot of infrastructure, there would be several million more successful people. The distinguishing feature of the successful entrepreneur is a unique idea, character and determination. Those are not evenly distributed in the population. Obama has never been a businessman, so he dismisses their wealth as somehow unearned, and thus available to be appropriated.

    It makes me wonder what he said to the successful businessmen from whom he was seeking campaign funds when he was last in San Francisco a month ago? He disses them and then takes their money. Where is the integrity in that exchange?

    Wanda J. Jones
    President
    New Century Heatlhcare Institute
    San Francisco

  25. david says:

    http://slate.com/articles/news_and_politics/frame_game/2012/07/romney_s_naacp_speech_how_he_triangulates_against_gays_blacks_and_pro_choicers_.html

    Wanda, it seems the president isn’t the only person who disses people and then takes their money (actually, I doubt Mitt Romney got much most from those groups, but he tried anyway). Romney also made sure to tell Olympians in 2002 that they owed part of their success to communities willing to build training facilities.

    He doesn’t dismiss money made through entrepreneurship as unearned, but he does (rightly) believe that wealth creation is made possible by the government, so entrepreneurs and everyone else have an obligation to maintain the systems that allow our prosperity.

    One such government entity is the small business administration, which is now run by a cabinet-level officer thanks to Obama. Without the SBA, many small businesses wouldnt be able to trade overseas or seek international patent protection.

    And I hope your gratitude to “Mr Buffett” wasn’t facetious.

  26. Bill says:

    Interesting that you totally misinterpret his meanings and left out half of what he said.

    Especially the part about people getting there by their own initiative but that we know that things work out good when we do things together.

  27. Tom Carney says:

    Jennie, you are consistant for sure. “People who do incredibly valuable work like Police, teachers,and fireman, make very little compared to what they contribute. In Calif. they make a great deal of money when you consider their fenoninal benifits, have tenure,senority and pretty much a job for life Corporations unlike teachers,fireman, cops, Gov. employees DO NOT creat jobs as Corporations do. Is not creating jobs an abmirable give back to the community??? Smart thinking and hard work, still a cornerstone to our free enterprize economy, as much as our presedent does not appriciate these qualities, DO still pay off and reward you with a better living.

  28. Tom Carney says:

    David for you to say “that Obama does not dismiss money made through entrepreneurship, but he rightly beleives that wealth creation is made possible by the government, so entrepreneurs and everyone else have an obligation to maintain the system.” That is SUCH a Straw Man statement!! Lets make it completely clear we all beleive that we live in the greatest country for opertunity!! And our Gov. structure is very much apart of that. We all beleive in giving back and are prode to do so. Conservatives do not hate Gov. it is vital to our existance but we understand just how much power we have given our gov. and with that power if not kept small, nimbal and controlable it can be abused, just look at the NLRB and EPA under Obama if you need an example of abuse of power. This moral superior outrage spued by you on the left that all we conservatives are about is our greedy selves really gets old.

    ” He is not using fabricated conspiracies to “lash out”at those groups” what particen world do you live in? he uses envy to drive a wedge between those he calls millionaires and billionairs, yah those making more then $200k. “They don’t pay their fair share”? the top 5% pay 60% of National taxes up 50% since 1986. The bottom 50% pay little to none down dramaticall since 1986, Sorry David, these are fabricated conspiracies!

    “PC, were ONLY, my emphase, made possible because of Gov. research beginning in the 1960’s” Obama could not have said that better with such a complete lack of intellegent understanding of how inventions are brought to market and become successful, then you just did!! Nocia had all the understanding and intelectual knowledge on the smart phone way before Steve Jobs an Apple did. But guess what they did not think it was important? It’s what you do with the knowledge and opertunity not the knowledge itself.

    Then you go off on taxie drivers and income?? Boy that one is way out in far left field. Then you go back to the the indians, 1880’s? Why not go back to the Roman empire they did all kinds of barbaric things? And your accusitory point was what?? Then you read a study that “90% of income has nothing to do with hard work, ingenuity, etc”. Where do you pull this stuff out of….don’t answer that.

    We would not be anywhere as prosperious with out Gov. ” the free-est markets in the world can be found in Latin America and Sub-Saharan Africa” that is such an ignorant statement it is not worth commenting on!

    Warren Buffet, really should stick to investing. To say he would be struggling after 30 years if he found himself in Bangladesh is again a Straw Mans argument but more importanly a compliment to our free enterprize system that allowed him to conduct his business with out undue Gov. interferance.

    Lastly let me correct your misleading left playing with facts and income statistics: “since the 70’s the real wages have been stagnent or falling while profits have been rising in other words the rich have gotten richer while the poor have gotten poorer” According to data aggregated by the Tax Foundation, total adjusted gross income (taxable income using IRS definitions) was $1.63 Trillionin in 1980 and $7.83 trillion in 2009. Yes the top 1% saw its share of that income rise from 8.5% to 16.9% and yes the bottom 50% saw its share go from 17.7% to 13.5%. BUT that smaller share in 2009 was $1.05 trillion a 265% increase or 8.81% avg. annual increase from the $288 billion earned in 1980. But the bottom 50% also saw their share of total taxes paid fall from 7.1% to 2.15% or a 230% drop in taxes paid. The poor today are far better off then they were 30 plus years ago. sorry another straw man argument on your part.

  29. Nils-Eric Sandberg says:

    Mr. Goodman,

    President Obama´s talk about the self-made as an illusion is, as you say, bad logic, bad philosphy and bad economis. But it´s also bad history. We who, as I for instance, who have spent halv a lifetime studying economic history, know very well from all our books and seminars that the self-made man was the most important person behind the creation of the tecnological and economic development in Europe and the US. We could go to Joseph Schumpeter, and Douglass North, and Nathan Rosenberg and L E Birdzell, for evidence. Just a few of all I have been reading for my work as an economist and leader writer for Dagens Nyheter, the biggest morning daily in Sweden. I have left the newspaper and work as a free-lance, writing books. columns, and doing economic research. I am also a member of the Mont Pelerin Society.

    Nils-Eric Sandberg
    Sweden

  30. david says:

    @Tom, people in Korea and Japan have or once had lifetime employment guarantees, and their economy did just fine. In fact, they were called “miracle economies” during that time.

    We don’t have the most opportunity in the world. “Today, a child’s life chances are more dependent on the income of his or her parents than in Europe, or any other of the advanced industrial countries for which there are data. The US worked hard to create the American dream of opportunity. But today, that dream is a myth. ” -Joseph Stiglitz, Nobel Prize winner and former World Bank chief economist.

    I don’t really like that those on the right consider such things as welfare or healthcare or equality or education are “moral” issues. They all have serious impact on economic growth, social cohesion, and the “realness” of our democratic ideals.

    I said the fabricated conspiracies thing in response to what seemed like a suggestion that Obama was behaving like Hitler. There’s no protocols of zion being passed around, so if that was the reference, it’s irrelevant. Capital gains taxes are extremely low and I feel no sympathy for the fact that rich people pay most of the taxes because poor people don’t make enough income to make it into the highest tax bracket. That number also only applies after transfers are made, which doesn’t really add much to the argument.

    I don’t really understand the point about Nokia… they wouldn’t have had any of that knowledge without the subsidies and protection of their logging business that paid for their unprofitable electronics business for 17 years. Also made possible by government.

    My point with the taxi driver is that an Norwegian cabbie doesn’t make more money than a New Yorker cabbie because he works harder. There’s a lot more to it than hard work, hence the 90%.

    Free-est markets in Latin America and Sub-saharan Africa: the only thing “ignorant” about that truth is that you are ignoring it because it’s “not worth commenting on.” Both those regions grew substantially during the 50s and 60s using a lot of protectionism. Since the 80s, we’ve pushed them to free-market principles (killing a lot of people along the way, similar to our policy with the Native Americans) and growth rates have dropped or gone negative. It’s also wiped out a lot of crucial industries that couldn’t compete on the international level.

    And, no offense, but I’m gonna take Warren Buffet’s word over yours about how he made his money. Unless you are Bill Gates, then I don’t care that you think Buffet’s wrong, because frankly he’s not.

    Hourly wages have gone nowhere in 40 years. I can’t do it here, but go to the FRED site of the St. Louis Fed to get hourly wages and the CPI. Divide hourly wage by the CPI and you will see that it’s not much if any higher than it was in 1964. If you trust wikipedia, it will show you the same thing, but my method works as well.

    http://en.wikipedia.org/wiki/Real_wage

  31. david says:

    Real hourly wages have gone up 50 cents in the last 30 plus years. That doesn’t qualify as “far better off” in my book, especially given how much productivity has improved. In 2005, we couldn’t have even said 50 cents, and the only reason real wages have gone up since 2007 (ironic, given the recession) is that people are doing more work than previously.

  32. Tom Carney says:

    David
    As for Japan their economy has been stagnated since 1990 and South Korea’s economy is too young to evaluate. But what makes S Korea’s economy strong is it strong emphase on free markets and free competition.

    The opertunity not as good here? Tell that to Obama who comes from a single parent home with low income??

    Joseph Stiglitz is obcessed with the top .001% as is your buddy Buffet. And I do not disagree with that inequality through monopolies and special treatment but to obcess over that infentesimal small group of the population and then draw conclusions from that is to miss the Big Picture that we are still the land that offers the best possible opertunities for anyone who wants to educate himself and then work hard to acheive a goal. Our economic success, as Stiglitz himself admits, is based on the vast majority of small to medium sized business. Our Free enterprise system based on small to medium sized business needs an umpire as all indevers do to control for cheats and reward hard work but the liberal Gov. idea is all about the creation perfection so it has to be BIG to control, to regulate for ALL possible wrongs. What you end up with is where Obama has us going the Big Gov. Wealfare state. Then you get the unintended consequences as they have in Europe’s death spiral.

    Wealfair not a moral issue that is all it is. And now Obama just eliminated, from Clinton’s Wealfair Act, the work or education stipulation. Now that is a real unfortunate moral issue, or maybe, in this case, just one more splinter costituency he is pandering to!!!

    David, Hitler made the jews the bad guys Obama has made successful people the millionaires and Billionaires those making over $200k the bad guys. Get it David get it!!

    Capitol gains are taxed TWICE please learn our pathetic tax code before you make such inacurate statements.

    The point of Nocia is that we all have the largess that this bestowed on us because we were fortunate to be born in this country. It is what you do with this largess not the largess. It is the entrepernuer NOT the Gov. that has built this country and made this the greates place in the world for opertunity. Sorry Mr. Stiglitz we are the greatest country if you have a dream, educate yourself, and work hard for success.

    Still your cab driver anology makes no sence. a cab driver in NYC or London will succeed and do better the harder he works. Of course there is lots that go into being able to get to be a cab driver but hard work is a paramont factor.

    industrialization, internationally, continentally or locally by its nature makes unadaptive industries obsolite. That is how we got cars from hourse drawn carages, how we got computors from calculators and typwriters. I guess you just really are opposed to progress because it is sometimes cruel and some will be hurt and lose a job? Its called progress….sorry

    Warren Buffet does ONE thing well; he knows how to invest in companies. His obcession with the top 400 familes and the income tax they pay is just that, an obcession. Ther are MUCH bigger problems in our tax code then the fact that 400 top familes make most of their money from Cap Gains which is a tax on the companies they have ownership in that have already paid a tax on their earnings. Pleas learn our tax code. It is the most progressive of all developed countries including the socialist Scandinavien countries.

    Mr. Stiglitz agrees with you our middle class incomes have not gone anywhere?…..WRONG What you both have missed is that most of these middle class people have moved up into the higher tax brakets, fare more poeple in the $50k plus brakets then there were 30 years ago, making lots more money,45-60% of them to be exact. Its called opertunity through hard work that allows you to move up. Fact those dam facts you guys need to get them right. Please look at the whole picture not just that part that makes your narative look right!!