oldjones said:
I don't have the link (new computer) but I do have the PDF, it's titled "Individual Income Tax Returns, 2000" the authors are David Campbell and Michael Parisi..... I can email it to you if you like.
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The rich are getting richer...
- Thread starter Questor
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I don't have the link (new computer) but I do have the PDF, it's titled "Individual Income Tax Returns, 2000" the authors are David Campbell and Michael Parisi..... I can email it to you if you like.
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Ok, an Econ101 definition, but in the real world, paintings are commonly bought and sold as investments, paintjobs usually not—though any real estate agent will tell you different. But we're off on a bit of a tangent. The topic is actually the income gap between rich and poor and who's supporting who; at it's most absurd the rich are being credited with supporting us all by their spending/investing. And we should be damn grateful, too.someone said:
Whether the pool of money is in the hands of the rich, the banks and other institutions or the government, it can be invested/spent. But which of those is charged with doing so for the benefit of all? And how is there more or less money available because the rich, or the government or the banks or … an enriched poor holds it to invest/spend?
PS: Personally, I'm very grateful Mr. Carnegie, Mr. Thomson and Mr. Mellon bought paintings and ivories and library books, and consider them real investments—as opposed to how Ken Lay 'invested'. But the kind of investment I see few signs of among today's rich is the kind Henry Ford made when he gave all his workers, who were already making more than twice the average industrial wage, a wee raise: He doubled their wage-rate.
And they bought his cars.
And his stock.
A growing income gap is bad for us all.
You may be missing a critical point. The wealthy are indeed supporting us by their wealth creation. While you can imagine the idiot sons who inherit wealth (Ted Kennedy, both Bushs, Kerry.... leap to mind). The better model for you to consider is Bill Gates, who along with a hand full of other extremely rich young men on the left coast helped build the most important industry the US has. Hundreds of Billions in wealth have been created by these men, and yes we are all (rich and poor) better off because of it.oldjones said:
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In England they're adopting more flexible repayment schedules that allows students to establish families while paying off their student loans and establishing themselves in the workplace. That's a good idea.danmand said:
It's good that the rich are getting richer. We can support more hookers. Why would anyone be surprised tht the Toronto Star posted that article. They've pretty much been the house organ for the Liberal party forever. Except of course when they are supporting the NDP and corrupt communist regimes..
I dunno how envious I would be at $300.00 refunds from Bush Jr. in 2001 and now $30.00 refunds in 2006. Remember, before the US invaded Iraq, Saddam issued rations to his people at roughly the same value.LancsLad said:
Gyaos Baltar.
Equally true to say Bill Gates has been supported by all those workers who actually produced the code his companies sell. All this 'who supports who silliness' ignores the issue in the OP: what sort of society has such large gaps between the rich and poor. We're never gonna have a society without both, but the gap could be less. IF America's (both sides of the 49th) poor were better provided for as children, never mind as adults, perhaps Gates would have had more competition. And we'd have a better society.onthebottom said:
And of course the Gates example presumes that a PC running Microsoft products is a good thing.
The reason the US has the largest gap between rich and poor is because this is a very good place to become rich - that's called opportunity. The ecnominist ran an article a couple years ago (which I've posted here many times so I won't repeat unless you really want me to) that draws the following conclusions:oldjones said:
- The US has the largest gap between rich and poor
- The US poor are in about the same shape as those in Euro countries with stronger social systems
- The US is a very mobile society where a majority of those in lower quintiles move up over time.
- The large gap is driven by the rich in the US, they are much richer than their peers in other countries.
If you believe the above, which I do, then this gap is an indication of the opportunity in the US, and I think that's a good thing.
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oldjones said:
We do.
But like the man said: "You can lead a horse to water but you can't make it drink". The same holds true for education. The key to many doors is education, not socialism.
I have not had time to read this cover-to-cover myself. I had read about it in the Globe and your post reminded me of it, so I did a search.. It gives a different picture than your source. I schemed the intro and the following stood out:onthebottom said:
Edit: given the date, this is likely not the same study I read about in the Globe (it was more recent), however, it basically said the same thing, from what I recallStatscan said:
I saved it and will read it later, same topic as the Economist article.....someone said:
It is very old, 1995 is twelve years ago, a lot has changed.
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I know I've read about a more recent Statscan report that came to similar conclusions but I don't have time to try to find it. Anyway, 1995 is not that old (your economist reference was likely based on a second hand reading of an article not that much more recent). I doubt if that much has changed.onthebottom said:
Absolutely. Too bad so many of those state-funded public schools (socialism before Marx) provide such a poor version of it. Could it have anything to do with the grudging support they get? I believe the stats for social evils like crime vary inversely with dollars spent on education, while prosperity indexes vary directly. And public education—paid for by all according to ability to pay has long been held up as a cornerstone of American democracy.papasmerf said:
I haven't looked it up, but my memory of high school history was that state-funded education, welfare and pensions were an innovation of Bismarks' because he saw that Prussia would prosper with a competent, healthy and confident working class. These are not socialist concepts, just common sense.
Now to get back to the OP: S'pose the rich threw even more into the pot than they now do, so that the ratio stayed 40:1 as it was thirty years ago, instead of doubling to 80:1 as it is now. Think how much better educated—and qualified for better jobs—all those poor people would be. Better workers, better jobs, better pay, less welfare, less crime. better country.
I think the US ranks third on per student spending in K - 12 education (over 12k if memory serves, I think only Canada and Lux spend more), almost twice the UK for instance. Throwing more money at education won't change the results.oldjones said:
As a tip of the hat to Someone here is the 2006 OECD Education at a glance for the US. http://www.oecd.org/dataoecd/51/20/37392850.pdf
I listened to a short but depressing NPR report Thursday, they said a large percentage of African American male students don't graduate from high school and that those who drop out have a better chance of being in jail than being employed.
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Another view....
Inequality of What ... and When?
by Alan Reynolds (More by this author)
Posted: 02/08/2007
President Bush recently announced that inequality has "been rising for more than 25 years." But what did the president mean by inequality? And when, during that 25- year period, was inequality rising?
Edward Lazear is chairman of the President's Council of Economic Advisers, so he seems a likely source for the president's impulse to be mistaken for a Democrat. In a speech last May, Lazear said, "There is little doubt that there has been a 25-year trend of a growing gap, sometimes called income inequality, between the wages of the skilled and the unskilled."
"College graduates," he explained, "earn about two-and-a-half times as much as high school drop-outs." If that weren't the case, why stay in school?
The "skill gap" between earnings of college graduates and dropouts is not what "income inequality" means. Economists who try to explain differences in household income by differences in earnings among full-time workers are ignoring huge differences in the number of such workers. There were 16.7 million full-time workers in the top fifth in 2005, but only 3.2 million in bottom fifth. The emphasis on earnings inequality also ignores the source of most income of the bottom fifth -- namely, more than $1.5 trillion of government transfer payments such as Social Security, unemployment benefits, the Earned Income Tax Credit, Medicaid and food stamps.
Even if wage gains are still growing much faster among college grads than among high school grads and dropouts (which has been unclear since about 1993), that certainly would not imply larger numbers of Americans are stuck in low-wage jobs today than in the past. In 1980, only 14 percent of the workforce had four or more years of college, while a third had less than a high school diploma. By 2005, a third had graduated college and only 10 percent had less than a high school diploma. The relative wages of college grads and dropouts are far less significant than their relative numbers.
Fed Chairman Ben Bernanke joined the presidential chorus in a recent speech. He too said, "Rising inequality ... has been evident for at least three decades." Like Lazear, he quickly changed the subject from income to some gap in "real weekly earnings" between the top and bottom 10 percent of "full-time wage and salary workers" in 1979 and 2006. Average earnings of those narrow slices of full-time workers cannot possibly measure actual income inequality, unfortunately, because very few low-income households contain anyone who works full-time.
Looking at data for 1979 and 2006 cannot tell us whether any change between those years happened recently or a long time ago. He even notes, paradoxically, that "wages of workers in the middle of the distribution have grown more slowly in recent years than those of workers at the lower end of the distribution."
Bernanke did mention disposable income, but provided data for only two years, and that data is incorrect. He said, "The share of income received by households in the top fifth of the income distribution, after taxes have been paid and government transfers have been received, rose from 42 percent in 1979 to 50 percent in 2004." The top fifth's share of income before taxes and transfers was 50 percent in 2004, so it could not possibly have been unchanged after taxes were subtracted from top incomes and transfers added to lower incomes.
The correct figure for the top fifth's share of disposable income was 44.9 percent in 2004 -- essentially unchanged from the 44.8 percent figure of 1993. The top fifth's share of disposable income did rise from 40.7 percent in 1979 to 43.4 in 1985 and 43.5 percent in 1988. But it still remained at 43.3 percent in 1992, and the apparent increase since then (to 44.9 percent) is a statistical illusion.
In 1993, Census surveys were computerized and the maximum amount of recorded earnings from one source increased from $299,999 to $9,999,999. As soon as that happened, the top fifth's share suddenly appeared to jump by 1.5 percentage points to 44.8 percent in 1993. But that was no increase in inequality. The Census Bureau was simply collecting better information on high incomes. Aside from the statistical aberration of 1993, in other words, the top fifth's share was essentially unchanged from 1988 to 1992 and unchanged from 1993 to 2004. The related Gini index for disposable income -- a broad measure of income inequality for all households -- has been virtually unchanged since 1985, aside from gyrations caused by the problematic inclusion of taxable capital gains.
Citing the Congressional Budget Office (CBO), Bernanke claims, "The share of after-tax income garnered by the households in the top 1 percent of the income distribution increased from 8 percent in 1979 to 14 percent in 2004." Two-thirds of that alleged "trend" in the top 1 percent's share ended in 1988 and the rest in one year -- 2004. In a Feb. 6 Wall Street Journal article with David Henderson, I demonstrated that the top 1 percent's share appeared to increase only because the CBO incorrectly adds an unbelievably huge and rising share of corporate profits to top incomes. Even with that overestimate included, however, the top 1 percent's share of after-tax income increased from 8 percent in 1979 to 12 percent in 1988 and was still 12 percent in 2003.
Nobody can possibly prove a "long-term tendency toward greater inequality" by drawing an imaginary straight line between two years such as 1979 and 2004. When officials in such high positions claim income inequality has increased "since 1979," are they not obliged to confide that the increase ended around 1988?
Mr. Reynolds is a senior fellow with the Cato Institute.
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Inequality of What ... and When?
by Alan Reynolds (More by this author)
Posted: 02/08/2007
President Bush recently announced that inequality has "been rising for more than 25 years." But what did the president mean by inequality? And when, during that 25- year period, was inequality rising?
Edward Lazear is chairman of the President's Council of Economic Advisers, so he seems a likely source for the president's impulse to be mistaken for a Democrat. In a speech last May, Lazear said, "There is little doubt that there has been a 25-year trend of a growing gap, sometimes called income inequality, between the wages of the skilled and the unskilled."
"College graduates," he explained, "earn about two-and-a-half times as much as high school drop-outs." If that weren't the case, why stay in school?
The "skill gap" between earnings of college graduates and dropouts is not what "income inequality" means. Economists who try to explain differences in household income by differences in earnings among full-time workers are ignoring huge differences in the number of such workers. There were 16.7 million full-time workers in the top fifth in 2005, but only 3.2 million in bottom fifth. The emphasis on earnings inequality also ignores the source of most income of the bottom fifth -- namely, more than $1.5 trillion of government transfer payments such as Social Security, unemployment benefits, the Earned Income Tax Credit, Medicaid and food stamps.
Even if wage gains are still growing much faster among college grads than among high school grads and dropouts (which has been unclear since about 1993), that certainly would not imply larger numbers of Americans are stuck in low-wage jobs today than in the past. In 1980, only 14 percent of the workforce had four or more years of college, while a third had less than a high school diploma. By 2005, a third had graduated college and only 10 percent had less than a high school diploma. The relative wages of college grads and dropouts are far less significant than their relative numbers.
Fed Chairman Ben Bernanke joined the presidential chorus in a recent speech. He too said, "Rising inequality ... has been evident for at least three decades." Like Lazear, he quickly changed the subject from income to some gap in "real weekly earnings" between the top and bottom 10 percent of "full-time wage and salary workers" in 1979 and 2006. Average earnings of those narrow slices of full-time workers cannot possibly measure actual income inequality, unfortunately, because very few low-income households contain anyone who works full-time.
Looking at data for 1979 and 2006 cannot tell us whether any change between those years happened recently or a long time ago. He even notes, paradoxically, that "wages of workers in the middle of the distribution have grown more slowly in recent years than those of workers at the lower end of the distribution."
Bernanke did mention disposable income, but provided data for only two years, and that data is incorrect. He said, "The share of income received by households in the top fifth of the income distribution, after taxes have been paid and government transfers have been received, rose from 42 percent in 1979 to 50 percent in 2004." The top fifth's share of income before taxes and transfers was 50 percent in 2004, so it could not possibly have been unchanged after taxes were subtracted from top incomes and transfers added to lower incomes.
The correct figure for the top fifth's share of disposable income was 44.9 percent in 2004 -- essentially unchanged from the 44.8 percent figure of 1993. The top fifth's share of disposable income did rise from 40.7 percent in 1979 to 43.4 in 1985 and 43.5 percent in 1988. But it still remained at 43.3 percent in 1992, and the apparent increase since then (to 44.9 percent) is a statistical illusion.
In 1993, Census surveys were computerized and the maximum amount of recorded earnings from one source increased from $299,999 to $9,999,999. As soon as that happened, the top fifth's share suddenly appeared to jump by 1.5 percentage points to 44.8 percent in 1993. But that was no increase in inequality. The Census Bureau was simply collecting better information on high incomes. Aside from the statistical aberration of 1993, in other words, the top fifth's share was essentially unchanged from 1988 to 1992 and unchanged from 1993 to 2004. The related Gini index for disposable income -- a broad measure of income inequality for all households -- has been virtually unchanged since 1985, aside from gyrations caused by the problematic inclusion of taxable capital gains.
Citing the Congressional Budget Office (CBO), Bernanke claims, "The share of after-tax income garnered by the households in the top 1 percent of the income distribution increased from 8 percent in 1979 to 14 percent in 2004." Two-thirds of that alleged "trend" in the top 1 percent's share ended in 1988 and the rest in one year -- 2004. In a Feb. 6 Wall Street Journal article with David Henderson, I demonstrated that the top 1 percent's share appeared to increase only because the CBO incorrectly adds an unbelievably huge and rising share of corporate profits to top incomes. Even with that overestimate included, however, the top 1 percent's share of after-tax income increased from 8 percent in 1979 to 12 percent in 1988 and was still 12 percent in 2003.
Nobody can possibly prove a "long-term tendency toward greater inequality" by drawing an imaginary straight line between two years such as 1979 and 2004. When officials in such high positions claim income inequality has increased "since 1979," are they not obliged to confide that the increase ended around 1988?
Mr. Reynolds is a senior fellow with the Cato Institute.
OTB
