Brent Nyitray
Fairlington Blade
Let the mutherfuker burn!
jnc4p
Kevin S. Willis
Michigoose
lmsinca
markinaustin
Arcanaut
novahockey
quarterback
ScottC
yellojktHere’s an interesting article by Jim Pethokoukis (formerly of Reuters, now with AEI) in which he states that there really is no increase in income inequality.
I’ve clipped this portion in honor of Kevin,
“4. A 2010 study by the University of Chicago’s Bruce Meyer and Notre Dame’s James Sullivan notes that official income inequality statistics indicate a sharp rise in inequality over the past four decades: “The ratio of the 90th to the 10th percentile of income, for example, grew by 23 percent between 1970 and 2008.” But Meyer and Sullivan point out that income statistics miss a lot, such as the value of government programs and the impact of taxes. The latter, especially, is a biggie. The researchers find that “accounting for taxes considerably reduces the rise in income inequality” over the past 45 years. In addition, “consumption inequality is less pronounced than income inequality.””
Food for thought in the current OWS environment.
—Troll
Filed under: Uncategorized |
All Things in Moderation 
"consumption inequality is less pronounced than income inequality"And it would seem to me that purchasing power inequality is not likely as pronounced as raw income inequality.Thanks, McWing!
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I don't have time to look at the link right now but I will McWing. Despite the fact I seem to be the only girl left I'll still try to give you guys a run for your money occasionally. Right now I'm doing girlie things though, like making a tutu.I'll try to get to it in the morning. Are you back from your meetings?
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Hi Lms!Back from the meeting. Nothing like a Marriott in Dallas to inspire you!I'm not convinced that the making of a Tutu is girly. The wearing of one would qualify though.
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Hey, Troll, glad you survived your meetings, especially at a Marriott. I don't like Marriott hotels. Too many bad experiences. Once I had to stay at one in a certain city numerous times to take depositions over a year or two. Was not a pleasant hotel, and not too clean. Then I serendipitously had to stay there again for another unrelated case. A freak snow storm blew through in the afternoon during the deposition, and everyone deserted town. Three lawyers jumped in a car and headed for White Plains airport through deepening snow. At the airport, they started cancelling flights, but mine stayed on the board. I was hungry, so I ate a greasy cheeseburger and fries at the only restaurant while I waited.At long last … my flight was cancelled,too. One of the last, if not the last. By then, all the area hotels were booked. I finally found a room a county or two over … at a Marriott. When I finally arrived, it was a drop-dead duplicate of the one I had just left and hoped never to see again.Also, the cable was out. The gift shop was closed. Newspapers were gone. I had read every scrap of paper in my briefcase and had nothing left to do. I read the TV guide, and then sat there with my thoughts in a room exactly like the one the night before. Oh, there was one good thing … a Ruth's Chris Steakhouse was connected to the hotel, but since I had just eatan a greasy cheeseburger, I couldn't even drown my sorrows in steak.Ah, the glamorous life on the road.Btw, we had a discussion of this article the other day … I posted about it but gave my post the more incendiary title Manufacturing Inequality. Great minds …. It's an interesting and always timely topic though, no reason we can't pick it up.
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For me, the fatal flaw for Marriot's is that they don't carry Diet Coke. It's not like their clientele are teenagers, we've already made our beverage decision for Gods sake! Why alienate half your customers? Pepsi must give it to them for free. Sheesh.Oops for double post. Or, as Ace might say, it's not a double post, but a recontextualizing of the original post.
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Hey, no worries. I suspect that lms and other Left Coast Bureau personnel can't get enough of this "skewering" of income inequality claims.I do have friends to make out big time on the Marriott rewards program.
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From Troll's Link-“Inflation of the richest 10 percent of American households has been 6 percentage points higher than that of the poorest 10 percent over the period 1994–2005. This means that real inequality in America, if you measure it correctly, has been roughly unchanged.” And why is that? China and Wal-Mart. Lower-income families spend a larger share of income than wealthier families on goods whose prices are more directly affected by trade. Higher income folks, by contrast, spend more on services which are less subject to foreign competition."I am far from my general field of knowledge and distracted by Michigan State attempting to hang on against Wisconsin, but this seemed a bit off. First, it seems to measure wealth rather than income (the title of the post). Second, the point seems to be that the income or wealth of the rich is more heavily impacted by inflation because they spend their money on nice stuff and expensive services whereas others only make enough to buy cheap crap from China. Man are those poor people lucky they can't afford nice services and products or else inflation would really get them. I get how that narrows the wealth gap, but I'm just not sure how to weigh that out given that the wealthy are free to spend all their money at Walmart just like those who aren't wealthy.
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Holy cow, this game is unbelievable. That was definitely a Sparty TD.
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I didn't realize that was the same piece that qb linked to earlier in the week. I suppose there are different metrics you could use to determine how fantastic the middle class is faring compared to the top 1% and consumption would be one. Or again, you could look at the chart of income from 2010 and realize that it's not some imagined phenomena.(CBS/AP) WASHINGTON – Fifty percent of U.S. workers earned less than $26,364 last year, and those earning less than $200,000 per year – roughly 99 percent of Americans – saw their earnings fall a collective $4.5 billion.There were fewer jobs, and overall pay was trending down — except for the nation's wealthiest, who saw a boost.While the incomes of the top 1 percent of the country rose slightly in 2010 (from $1,909,874 in 2009 to $2,196,124 last year), their collective wage earnings rose dramatically, by about $120 billion.MoneyWatch: How much better are the super-rich doing than the 99 percent?Those earning at least $1 million a year (93,725 of Americans) reported payroll income totaling $224 billion – a rise of 22 percent above 2009.The statistics from the Social Security Administration, citing payroll data based on W-2 forms submitted by employers to the Internal Revenue Service, reflect a growing income gap between the nation's rich and poor, the government reported Thursday.Wage statistics for 2010 (SSA.gov)Despite population growth, the number of Americans with jobs fell again last year, with total employment of just under 150.4 million — down from 150.9 million in 2009 and 155.4 million in 2008.In all, there were 5.2 million fewer jobs than in 2007, when the deep recession began, according to the IRS data.The figures are just one more indication of the toll that the worst downturn since the Great Depression has taken on the U.S. economy.
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qb:I missed most of the game but caught that last play. What an ending.BTW…next time you are stuck in White Plains, give me a heads up. I'm twenty minutes away and my house is much better than Marriot.
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The researchers find that “accounting for taxes considerably reduces the rise in income inequality” over the past 45 years. In addition, “consumption inequality is less pronounced than income inequality.”"—I'm curious as to the statistics. It's a statement along the lines of "accounting for inflation, prices for oil have been static over the last 25 years". OK. So, give me the inflation adjustment or the aMy rough recollection is that taxes for the top bracket are 20 – 25% net. So, that simply means the relative earnings growth is 75% or so of the gross income growth. I'm not an account, but I do understand statistics. A favorite trivial bit for me is that someone working for Guinness invented the T-test.Consumption inequality strikes me as an invented metric. It's well known that higher earners save a larger fraction of their earnings. That's why a VAT (or one of Cain's three 9s) hits lower earners harder. The author simply rebranded well known information and sprinkled some happy dust on it. I suspect if instead of referring to consumption inequality, he referred to savings inequality, the results would be much worse. But then, that wouldn't fit the thesis of the poor put upon high earners.BB
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ashot,Do you think it is true that no one but the highest earners has made any welfare gains in over 30 years?Thaty no one else has made any income gains?
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The general point isn't that nobody has made income gains except for high earners, but rather that the bulk of the gains have accrued to high earners."No one but the highest earners" is disproven by anyone who has hit it big. Sergey Brin for example. A debating point, I suppose, but not terribly convincing in a broader context. BB
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"“consumption inequality is less pronounced than income inequality.”"I wonder how much of the difference is made up via debt financed consumption.
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Actually, one of the principle claims that is routinely made is that the middle class on down has made no gains at all since the 70s. All the gains have gone to the highest earning group. That's part of the "99%" schtick. Go ask at PL. If you deny it there you'll be attacked as a heartless, selfish pig and liar. Wish I were making that up.
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Sorry I didn't get back earlier but it is my birthday weekend so I was busy hanging oUt with my family. Got a gaming watch so I can more effectively train for my next run. I think my next race is going to be 25k in may. Qb I do think there have been gains by the middle class and lower class for that matter. So call me the tin man. Go Green by the way. What an amazing game.
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I'll call you the tin man, shot, but not as an insult. As a point of argumentation, I prefer to deal with solid numbers. Median income peaked in the late 90s. Them's just solid facts. http://online.wsj.com/article/SB10001424052970204774604576628981208827422.htmlExtending to opinionating, I think it's crapola to assign that to the dot.com bubble. Median households didn't have a thousand shares in Priceline or Exodus. The recovery in the early 2000s was a bit slow in terms of income and any gains were wiped out in the current crash.There haven't been gains in the last decade for the middle or lower class. Quite a bit of losses. That's simply empirical data. Trying to fold in the preceding two decades to make things look better is a dubious point, at best.BB
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"Actually, one of the principle claims that is routinely made is that the middle class on down has made no gains at all since the 70s."Wouldn't the middle class be definition make few real gains–if they did, they'd not longer be in the middle class. ;)You'd think some of them were moving from the middle class to the upper classes, although America has poor economic mobility compared to much of the 1st world. However, you know whose even worse than America in terms of economic mobility? The UK. And they have National Healthcare. So, presumably, if we implement single payer healthcare, economic mobility will get worse in America, as well. Of course, just joshing (that's like the folks who suggest simply having higher taxes magically creates a robust economy), but it makes for an interesting thought experiment. Clearly, many folks don't like the idea of trading economic mobility for things like affordable electronics or a stable food supply. What about single payer healthcare? Would it be worth it to implement single payer healthcare even if we knew it would decrease economic mobility as a statistic?
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"Extending to opinionating, I think it's crapola to assign that to the dot.com bubble. Median households didn't have a thousand shares in Priceline or Exodus."Lots of them did, so if you're measuring wealth, it made a big difference. Most of those folks weren't taking income off their dot-com bubble inflated investments, which is why they lost all that money, but there were plenty of media income folks in the dot-com bubble (wasn't that when, for the first time, over 50% of Americans had money in the stock market and a record number of private (retail) investors were in the stock market?) . . . but also, companies swollen with illusory dot-com cash were paying more. I personally knew more than a few people who moved to another company (and usually another state) and so their incomes double, or more. Heard even more stories afterwards of generous payrolls and incentives to attract top talent, before those companies went bankrupt. Not a scientific survey, by any stretch of the imagination, but the idea that dot-com inflation influenced median income seems logical, to me.
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"Median income peaked in the late 90s. Them's just solid facts. http://online.wsj.com/article/SB10001424052970204774604576628981208827422.html"QB's question was in reference to the 70's and your response seems to indicate that income was rising until the late 90's which makes sense to me. Everything I've read indicates incomes have been stagnant since 2000 or so despite growing GDP for most of that time. Yes, things like taxes and inflation decrease the gap, but when people think of a wealth gap or income inequality, I think they look at how our economy grew but many people effectively got pay cuts as their health care premiums increased. Meanwhile, CEO salaries soared. That's the fundamental understanding (or misunderstanding as some see it) many people have of the inequality issue. People have continued to work as hard or harder than previously, but are essentially being told they are less valuable (actually they are being told they are "takers" and don't deserve to vote). There are entirely understandable economic reasons for that, but that explanation isn't goign to sit well when companies and their executives continue to make more and more money.
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ashot:People have continued to work as hard or harder than previously, but are essentially being told they are less valuable (actually they are being told they are "takers" and don't deserve to vote).By whom are they being told they are "takers" and don't deserve to vote?
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Scott- We regularly hear that the 50% who aren't paying income tax are takers and don't deserve to vote.
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ashot:We regularly hear that the 50% who aren't paying income tax are takers and don't deserve to vote. Well, the (roughly) 50% of tax filers who don't owe any income tax has certainly been a hobbyhorse of mine, So I guess I have some standing to address this. I have never called them "takers". No doubt some of them are, but I wouldn't paint with so broad a brush, especially since the problem is not them, but rather the tax system which politicians have created.I have suggested that only those who do pay taxes ought to be able to vote. This is based on the principle that the with the privilege of making policy comes the obligation to finance that policy. No one ought to be able to vote himself (or anyone else, for that matter) a free lunch at someone else's expense. Certainly, in any event, my position has nothing to do with "deserving" to vote based on how "hard" one works or how much one makes. It is simply that the right to vote ought to be linked to the obligation to bear the burdens created by voting.
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Scott – Good points. But why do you isolate it to the income tax? After all, there was no income tax until the early 20th century. Low income individuals pay:Excise taxesProperty taxes (assuming they have a car)FICA taxesamongst other (tarriffs, for example). I must also note that an effort to link income tax to voting rights effectively disenfranchises students. I was in college from 1982 – 1986 and grad school from 1988 – 1994. [I took a year out to deliver pizzas for Dominos. I probably paid income tax in that year.]Is this qualitatively different from the 18th century requirement to be a property owner? BB
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"It is simply that the right to vote ought to be linked to the obligation to bear the burdens created by voting."That sounds a little like a serfdom to me. I doubt the people making enough to pay income taxes did it in a vacuum. I'm fairly certain the people at the bottom rungs of the income ladder contribute to the wealth your "voters" have achieved.
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