It's disturbing that Bernie Sanders is actually receiving support for the Presidency

mike41703

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For gods' sake, I just did that in the post you just responded to. You ignored it. As usual.

You want me to stop posting about you? Stop being you!

I'm going to slip in and slip back out. I don't want to ruin what the 3 of you have going right now. I agree with your assessment of the chart. But I suggest that even though it appears to be a problem, it's not so much of a problem that the entire middle class is doomed. That is what I have been trying to say. In other words, it needs to be thoughtfully addressed going forward but we are not past a point of no return.
 

Rockfish1

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What is the purpose of graphing growth in terms of percentage change? All you are graphing is momentum, no?
No. You're still misreading the chart. There isn't a single data point for "percentage change" plotted anywhere on it. The y-axis is an amount, expressed on an index scale, with 100 percent as the base amount. The x-axis is years, with 1979 as the base year. The graph displays the amount of income earned at various points in the income distribution for the years since 1979. Specifically, it shows that relative to an indexed income of 100 in 1979, the top 0.1 percent earned an income of 324 in 2006 -- more than three times as much as the amount of income they earned in 1979. The rate of change can be inferred from the slope of the lines at any given point, but the graph doesn't display "percentage change". It displays amounts of income, expressed as a percentage of 1979 income, for years after 1979. All of your arguments about rates of change are irrelevant to this graph, which doesn't display rates of change.
Getting back to your graph. In year 2000 the rate of growth was about 400%. A few years later it was 300%. In reading your posts, you seem to be suggesting that the actual wages didn't grow at all and indeed fell during that time. Your graph, at face value, says the growth was still 300% (or maybe 200% based upon the final number of 324).
No. The graph doesn't display the "rate of growth." It displays the amount of income earned in a given year, expressed as an percentage of 1979 income. The chart shows that the top 0.1 percent saw their incomes fall from 400 percent of 1979 income as a result of the 2002 recession, then rebound. (You'd see the same thing happening after the Great Recession.) But again, these are not rates of growth for each year; they are amounts of income for each year. It's possible to infer rates of change from the slopes of the curves, but the chart displays amounts of income, not rates of change.

Again, CO., everyone who charts income inequality does it in the way this graph does. There is no problem with the graphs. The only problem here is your innumeracy.
 

CO. Hoosier

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he is incapable of having obvious errors explained to him

everyone looking at comparative CHANGES over time in individual income

as the best way to think of income inequality doesn't make it better than comparing per capita income over time.
 

TheOriginalHappyGoat

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No you didn't

Reread your answer. I didn't igonre it. I didn't respond to it because you continue to be off on a tangent. You were talking about changes and why 1,000 in change means different things to different people depending on the starting income You never get to this point if you would graph per capita income over a period of time. Per capita income is the epicenter on income inequality, not changes in income.
Yes, I did explain it. It won't work, and it's not meaningful.

Perhaps an illustration. If this graph is going to be meaningful, you're going to have to see some slope on each of the lines. Let's say for the sake of argument, you want the minimum slope visible to be one full inch over the course of the entire graph. That is, the lowest income group - the one that increased its income by 16% - would have a line that travels upwards by a total of one inch.

Now, you want to include the top .1% on the same graph. Here's the problem. In order to do so, the graph would need to be almost 60 feet tall. If you compressed it down so that it would fit on your computer screen, only the top .1% and 1% lines would show any meaningful slope. Everything else would just be a flat line.

The graph becomes unchartable and the vast differences in scale make comparisons meaningless. That's why percentages from a baseline year are used. It's the only way to make sense of the data and also make displaying it in any meaningful way possible.
 

iuwclurker1

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I understand all of this.

But the title of the graph is "annual" change. We now know that where the graph shows annual 324% for the final year, it doesn't mean 324% for the final year. It means 324% total over a 27year span. I get that. The graph is still messed up.
I don't understand

where you're seeing the word change in the title or any other part of the graph:

earnings%20growth%20mishel.png


The graph works as stated. It communicates clearly what it's meant to communicate and that is that if a 90%er enjoyed the same growth curve as the 0.1%ers, his annual income would be more than 4X what it was 27 years earlier.

Frankly, I wonder how many GOP voters would switch their allegiance if they understood those numbers clearly. $84,800 is one hell of a lot more than $20,000.
 

TheOriginalHappyGoat

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I'm going to slip in and slip back out. I don't want to ruin what the 3 of you have going right now. I agree with your assessment of the chart. But I suggest that even though it appears to be a problem, it's not so much of a problem that the entire middle class is doomed. That is what I have been trying to say. In other words, it needs to be thoughtfully addressed going forward but we are not past a point of no return.
I don't think anyone is doomed. But this fun argument you are jumping in and out have has devolved into fighting even over whether or not this is a meaningful trend that actually exists, which is just ridiculous. The minute someone denies basic mathematical reality because it conflicts with his or her political conception of the world is the minute he or she doesn't even belong in policy discussions in the first place.

Income inequality is increasing, and Rock's original graph accurately portrays that trend. This is inarguable. How much of a problem it is and what (if anything) should be done about it are the legitimate areas of debate, but with some people, we can't even get to that point.
 

NPT

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1. Dramatically increase capital gains taxes. The very top income brackets get a much higher percentage of their income from capital gains. This is why the effective income tax rate levels off and even begins to drop as you get inside the top 1%. A large standard deduction would help keep this change especially progressive while protecting retirement income of working class folks.
I would go along with that as long as as there was a certain amount of capital gains that were taxed at a lower rate to all the smaller investors to benefit from lower taxes.

2. Divorce health care from employment. Obviously, I'd prefer a single payer plan, but however it's done, health care shouldn't be a benefit of employment. Making this change would make it much more affordable for businesses to expand, creating jobs and better salary opportunities for employees.
That is hard to do in a fair way but I'm not saying it's can't be done. People work for lower wages to have health coverage. For example, what if someone has worked at the same company for 30 years (at lower wages because of health care) with the expectation of having health coverage after they retire. It's not fair to those people to just pull the rug out from under them and leave them hanging.
 
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Sope Creek

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A couple of things

It does start with zero. In this post you said: "the income of the upper .1% "is 324 percent higher than it was in 1979." You also started from zero, otherwise you would have said 424 percent as the vertical axis denotes. But this is a minor point.

I stopped after reading the paragraph quoted above. The "324% higher" reference means that the graph starts at 100 . . . .
 

CO. Hoosier

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No. The graph doesn't display the "rate of growth." It displays the amount of income earned in a given year, expressed as an percentage of 1979 income. The chart shows that the top 0.1 percent saw their incomes fall from 400 percent of 1979 income as a result of the 2002 recession, then rebound.

back to square 1

All this shows is the rate of income separation is increasing with the comparison being the top .1% and everyone else. The use of this graph plays into the view of those who think the problem with inequality is that the rich are too rich, not that the poor are stuck where they are. I just don't think this information is relevant.
 

CO. Hoosier

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I stopped after reading the paragraph quoted above. The "324% higher" reference means that the graph starts at 100 . . . .

????

Would "324% more" be better? I don't understand your point. The 324% means a an upward change, no?
 

CO. Hoosier

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I don't understand

where you're seeing the word change in the title or any other part of the graph:

earnings%20growth%20mishel.png


The graph works as stated. It communicates clearly what it's meant to communicate and that is that if a 90%er enjoyed the same growth curve as the 0.1%ers, his annual income would be more than 4X what it was 27 years earlier.

Frankly, I wonder how many GOP voters would switch their allegiance if they understood those numbers clearly. $84,800 is one hell of a lot more than $20,000.

Isn't "growth in annual earnings"

another way of saying change in annual earnings?
 

NPT

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I don't understand

where you're seeing the word change in the title or any other part of the graph:

earnings%20growth%20mishel.png


The graph works as stated. It communicates clearly what it's meant to communicate and that is that if a 90%er enjoyed the same growth curve as the 0.1%ers, his annual income would be more than 4X what it was 27 years earlier.

Frankly, I wonder how many GOP voters would switch their allegiance if they understood those numbers clearly. $84,800 is one hell of a lot more than $20,000.
Interesting stuff. Maybe I missed it but has anyone seen a graph like this that goes back early than 1979? Of course this graph doesn't mean a lot to me because it throws 90% of the people into one bucket and breaks out the others so we get a distorted view. I would love to see a graph like this with it broken down into 10% for each bracket. The old adage about it takes money to make money is true so it's easier for someone who has several million/billion to make money because the have more investment opportunities and can hire people that know how to make them money.
 

iuwclurker1

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Isn't "growth in annual earnings"

another way of saying change in annual earnings?
No. Change is, for example, y(t2) - y(t1) for the time period from t1 to t2. The graph plots y(t1), y(t2),... So growth is referring to percentage amounts at given points in time, not the change in percentage amounts from time to time. I can see your point, though, that growth could be misconstrued as change.

My point is simple: the graph is not messed up. It's possible to understand it and interpret it as the authors of the study intended and it makes sense the way they meant it to.

Also, it's not intended to show rates of changes, that is, the change of annual income per unit of time. It merely plots annual income at particular points in time divided by the original amount, multiplied by 100%, and, yes, as you point out, tallies the overall percentage change for the entire time period (which is not a rate -- an amount per time, but a percentage -- one amount divided by another amount x 100%).
 
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iuwclurker1

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One thing that should be remembered is that although upward mobility isn't quite as likely as it was 40 years ago, it's still likely that a person born in a certain quintile (except for the top, of course, and some percentage of those will end up in lower quintiles) will likely move up one or two more during his earning lifetime. So Joe, who started out at $20,000 per year, has likely gone up a line or two on the graph and is making something around that amount. I think many, if not most, of us here can attest to that being their own situation. I certainly can. Goat and I had a good discussion on this a while back.
The economic aspects are above my pay grade, but you're well traveled. It must have struck you as bizarre that your dollar would buy two apples in San Diego and maybe 20 apples in Thailand. Obviously, economics involves human artifice. Each economy revolves around transactions and there have to be enough to keep the system going. New people enter the job market and others leave. Averaged out, there has to remain enough buying power to power the transactions. That's where I thought CO.H's 100-person economy was silly. Economists call it a boundary case, I think. What if 1 person in the village owns everything? No economy. How much do the other 99 have to have, minimally, to maintain some economic equilibrium?

I think that's the real point of the graph. Is the income for the 90% approaching some point of disequilibrium for our American economy? Is our economy heading in the direction of a Third World economy or a feudalism or some such?

CO.H's point is, how to help the individual? Rock's point is, how to help the masses? Kinda like when Stalin said one death is a tragedy, a million deaths, a statistic. Kinda, but different. :)
 
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TheOriginalHappyGoat

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Interesting stuff. Maybe I missed it but has anyone seen a graph like this that goes back early than 1979? Of course this graph doesn't mean a lot to me because it throws 90% of the people into one bucket and breaks out the others so we get a distorted view. I would love to see a graph like this with it broken down into 10% for each bracket. The old adage about it takes money to make money is true so it's easier for someone who has several million/billion to make money because the have more investment opportunities and can hire people that know how to make them money.
That's the whole point. The fact that separating out the top 1%, and especially the top .1%, results in such a distorted graph is exactly what many people are suggesting is a problem. What that graph shows is that, since 1979, the top earners have gradually been capturing a higher and higher share of total income, while most earners have remained relatively stagnant.
 

TheOriginalHappyGoat

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That is hard to do in a fair way but I'm not saying it's can't be done. People work for lower wages to have health coverage. For example, what if someone has worked at the same company for 30 years (at lower wages because of health care) with the expectation of having health coverage after they retire. It's not fair to those people to just pull the rug out from under them and leave them hanging.

That's a really good point, but I suppose that's what Medicare is for.

That said...

The benefits people have received in lieu of pay are not ephemeral. They weren't just a promise of future coverage, but included current coverage in real time. I think it would be better if they received higher pay and health coverage were provided by the government, but no matter how you shake it out, it's not like people were receiving nothing.
 

mjvcaj

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The benefits people have received in lieu of pay are not ephemeral. They weren't just a promise of future coverage, but included current coverage in real time. I think it would be better if they received higher pay and health coverage were provided by the government, but no matter how you shake it out, it's not like people were receiving nothing.

I cannot believe I am advocating for the government employee, but I think you are drastically underestimating the impact this has on people's lives. Plenty of government employees have worked for lower wages in order to gain access to current and future benefits (above average HC throughout retirement, pensions, etc.). I cannot imagine having worked 30+ years with expectations of X and I'm really only going to receive X-Y.
 

TheOriginalHappyGoat

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I cannot believe I am advocating for the government employee, but I think you are drastically underestimating the impact this has on people's lives. Plenty of government employees have worked for lower wages in order to gain access to current and future benefits (above average HC throughout retirement, pensions, etc.). I cannot imagine having worked 30+ years with expectations of X and I'm really only going to receive X-Y.
It's going to have to be a gradual change, obviously. All I was saying was that the lower pay wasn't only in exchange for future benefits. It included current benefits, as well.
 

Ladoga

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Thanks. I hadn't realized almost a third of state GDP was manufacturing-related. I agree that IN should embrace this as other states move away from it. However, the risk is that if manufacturing as a % of GDP continues to decline, IN is fighting to acquire market share in a declining market.
But IF the US is going to maintain a base of manufacturing - and it absolutely must if we are to have national defense - Indiana will be glad to have it all. We are perfectly situated. Our geography ios perfect. Take one of those old fashioned geometry compasses and draw a figure 500 miles from our state borders on a US map. That "circle" runs from the northern plains through half of Ontario well into Pennsylvania, near the coasts in the SE and the Gulf and out into Arkansas. Within that "circle" is 2/3 of the wealth in this nation east of the Rockies. Why 500 miles? That's 8 hours in a truck. We also have a mammoth network of interstate highways to reach those and any other areas. We have lots of water - manufacturing needs water. We have a business climate generally and a manufacturing climate in particular that is extremely attractive to manufacturing decision makers. We are the manufacturing center of the country and the data shows how we are successfully making use of our advantages. Actually, the 550,000 manufacturing jobs are direct employment. If you take direct, indirect (all those ancillary functions now farmed out like maintenance, legal, etc. that used to be manufacturing employees themselves) and induced (how many hardware stores, hair dressers and retail outlets do you need if there is no wealth being created?) the employment number is about 1.9 million of a 3.2 million workforce.

What Indiana Makes Makes Indiana.
 

Rockfish1

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CO.H's point is, how to help the individual? Rock's point is, how to help the masses?
Every system is perfectly designed to produce the output it actually produces. Since 1980, our system has become perfectly designed to redistribute our national income upward to the wealthiest among us. I think this is the result of a great many policy decisions, almost all of which are ostensibly unrelated to the distribution of income, but all of which have affected outcomes in ways that those who lobbied for the changes understood and expected.

My point is that we had a system that actually did produce broadly shared prosperity during the decades that followed WWII. There still were rich people, and they were a lot better off than the poor people, but as the tide rose it lifted all boats; everyone got better off. We could have a system like that again if we chose to. But the necessary first step is to see reality as it actually is, without ideological blinders.
 

Rockfish1

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Of course this graph doesn't mean a lot to me because it throws 90% of the people into one bucket and breaks out the others so we get a distorted view. I would love to see a graph like this with it broken down into 10% for each bracket.
If you Google "income inequality" then click "Images" you'll find lots and lots of charts that all show exactly what I say is true.

For example:

cbpp%20income%20inequality%202011.png


inequality-p25_averagehouseholdincom.png


20111029_WOC689.gif


Notwithstanding CO. Hoosier's mathematically illiterate claims about the particular chart I chose above, all the charts show the same thing -- a massive redistribution of national income to those at the top of the income distribution. There is nothing controversial about that statement. As with climate deniers, there are those who refuse to accept it. But the reality is indisputable, even though know-nothings deny it.
 

Rockfish1

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The use of this graph plays into the view of those who think the problem with inequality is that the rich are too rich, not that the poor are stuck where they are.
And here we see the real problem. CO. Hoosier can't learn what he doesn't want to know.

e2c39881b5e8beeb74772fe64531c001.1000x750x1.jpg
 

mjvcaj

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It's going to have to be a gradual change, obviously. All I was saying was that the lower pay wasn't only in exchange for future benefits. It included current benefits, as well.

That is true. Obviously the value of future vs. current would differ by circumstance and preference.
 

iuwclurker1

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Every system is perfectly designed to produce the output it actually produces. Since 1980, our system has become perfectly designed to redistribute our national income upward to the wealthiest among us. I think this is the result of a great many policy decisions, almost all of which are ostensibly unrelated to the distribution of income, but all of which have affected outcomes in ways that those who lobbied for the changes understood and expected.

My point is that we had a system that actually did produce broadly shared prosperity during the decades that followed WWII. There still were rich people, and they were a lot better off than the poor people, but as the tide rose it lifted all boats; everyone got better off. We could have a system like that again if we chose to. But the necessary first step is to see reality as it actually is, without ideological blinders.
Right. You want to re-calibrate the playing field for the masses, CO.H wants to teach every individual to play on Wrigleyed Field. :)
 

TheOriginalHappyGoat

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Right. You want to re-calibrate the playing field for the masses, CO.H wants to teach every individual to play on Wrigleyed Field. :)
I think what's really going on at this point is simply that Rock is trying to get CO.H to understand that Wrigley is currently undergoing a tremendous renovation while the neighborhood parks most of us play in are falling into disrepair. That basic reality needs to be understood before they can even begin to debate what should or should not be done about it.
 

Rockfish1

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I think what's really going on at this point is simply that Rock is trying to get CO.H to understand that Wrigley is currently undergoing a tremendous renovation while the neighborhood parks most of us play in are falling into disrepair. That basic reality needs to be understood before they can even begin to debate what should or should not be done about it.
I think it's more like "admit" it than "understand" it. The absurd lengths he'll take to deny it illustrate that at some level he does understand it. I think it's very clear to him what he doesn't want to know. Hence all the bad faith posting.
 
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NPT

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If you Google "income inequality" then click "Images" you'll find lots and lots of charts that all show exactly what I say is true.

For example:

cbpp%20income%20inequality%202011.png


inequality-p25_averagehouseholdincom.png


20111029_WOC689.gif


Notwithstanding CO. Hoosier's mathematically illiterate claims about the particular chart I chose above, all the charts show the same thing -- a massive redistribution of national income to those at the top of the income distribution. There is nothing controversial about that statement. As with climate deniers, there are those who refuse to accept it. But the reality is indisputable, even though know-nothings deny it.
Really interesting stuff. I'll be the first to admit that I don't understand a lot of it and I have no doubt that the rich have gotten a lot richer. However, if I am making $100,000/year and I keep getting decent raises (i.e. 5%) why does it matter how much Bill Gates get? I think what you are saying (correct me if I am wrong) is that the really rich keep getting more and the middle of the pack stay where they are or actually lose. I've said it before and I'll say it again that it wouldn't bother me at all if after a certain level of salary (maybe $10 million) they taxed it at 90% because seems like the boards on companies are just a good ol' boys clubs. The sit on each others boards and vote for raises and bonuses for each other. After a certain level I also believe that capital gains should be taxed as normal income.
 

mike41703

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I don't think anyone is doomed. But this fun argument you are jumping in and out have has devolved into fighting even over whether or not this is a meaningful trend that actually exists, which is just ridiculous. The minute someone denies basic mathematical reality because it conflicts with his or her political conception of the world is the minute he or she doesn't even belong in policy discussions in the first place.

Income inequality is increasing, and Rock's original graph accurately portrays that trend. This is inarguable. How much of a problem it is and what (if anything) should be done about it are the legitimate areas of debate, but with some people, we can't even get to that point.

Thank you.
 

CO. Hoosier

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If you Google "income inequality" then click "Images" you'll find lots and lots of charts that all show exactly what I say is true.

For example:

cbpp%20income%20inequality%202011.png


inequality-p25_averagehouseholdincom.png


20111029_WOC689.gif


Notwithstanding CO. Hoosier's mathematically illiterate claims about the particular chart I chose above, all the charts show the same thing -- a massive redistribution of national income to those at the top of the income distribution. There is nothing controversial about that statement. As with climate deniers, there are those who refuse to accept it. But the reality is indisputable, even though know-nothings deny it.

Once again you make yourself irrelevant

You continue your blinkered notion that I deny income inequality, I deny it is a problem, and I deny that it is worsening.

You are so obsessed with me. You talk about me in posts to others than you do to me directly.

Your link of a week ago talks about eliminating rent seeking as one step to be taken. Check. I agree. Public rent seeking is a big problem. You favor more of it with your notions about even more government spending, more regulations, and your past support for QE. I've talked about the problems about that for months if not years. Public rent seeking is getting worse and worse. This is what is happening as I write this. This is the business-governmental axis. This is why Obama spent so much time fund-raising in Manhattan. This is why the Clinton Foundation is so intertwined with the huge movers and shakers here and the around the world. This is why Goldman Sachs et al own Obama and Clinton.

Rent seeking in the private sector is also a problem that shows itself in the H1-B program. Employers are unfairly increasing profit without corresponding benefit to ordinary people. I have spoken against that, as well as other public policy that suppresses wages for a long time. You support all of this. You think raising minimum wages will help this? It will make it worse. Higher minimum wages will do a number of things besides giving people a few extra bucks. It will be a further hammer on small business while the Wall Marts of the world get bigger and more powerful. Stop the flow of cheap labor and wages will tend to rise.

The miserable lives of the underclass is where the inequality rubber meets the road. Millions of people can't participate in the economy. The economy suffers because of this. None of your government-centered proposals and tax increases does any good because millions of Americans don't' have the skills to even flip a burger. You might remember Dagaonvich who used to post here. He was a strong trade union guy. He of course lamented the loss of influence of trade unions caused by the Obama-sponsored illegal immigration, but more than that, he was concerned by the significant lack of skills in the American population to even become trade union members. This is a problem that higher taxes or higher minimum wages won't fix. The Democratic policies do nothing to improve hopes and lives of millions of people who are trapped in nowhereville All you can manage to do is say rich are too rich and we need to toss a few more bucks for care and maintenance of the underclass. Sad.

I have said for years the hedge fund billionaires are a drag, are not the result of capitalism, contribute very little in terms of goods and services to the economy, at least no where near the value the accumulate, and you and yours always support this crap. Obama hasn't, and Clinton won't, change any of this. Several in the GOP have at least called for eliminated the carried interest tax benefit and other tax reforms to address the issue.

The Link you provided the last week also spoke in terms of more realistic tax codes. The only people talking about real change are the Republicans, not the Democrats. Want to stop rent seeking? Lets eliminate all the tax bullshit that allows rich people buy expensive Tesla's with a public subsidy--as just one example.

Spare me your stupid monkey cartoons. I have mentioned more ways to meaningfully address income inequality just in the last 24 hours than you have in years. All you can do is bitch about me and conservatives. All you can do is support Obama and Clinton whose ideas about this comes straight from the people who want, and pay for, even more government favors and subsidies and more regulations forcing out the small guy. They want the playing field for themselves. The domestic cornerstone of the Obama presidency was the horrible ACA which is more about favors, subsidies, regulation, and rent seeking than it is about reform. All it did was effectively give ill people coverage while having ordinary well people pay for that through a silly insurance exchange scam. More rent seeking. More maldistribution of income.

End of rant.
 

CO. Hoosier

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Right. You want to re-calibrate the playing field for the masses, CO.H wants to teach every individual to play on Wrigleyed Field. :)

just the opposite

I want millions of people playing in mostly free and open sand lot fields. Rockfish and the Democrats want millions of people playing in highly regulated and government subsidized Wrigly Fields which can only be supplied by the wealthy and well connected political and business class.
 
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iuwclurker1

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just the opposite

I want millions of people playing in mostly free and open sand lot fields. Rockfish and the Democrats want millions of people playing in highly regulated and government subsidized Wrigly Fields which can only be supplied by the wealthy and well connected political and business class.
I deliberately over-simplified so I could use Wrigleyed as a joke. My armchair view is that the situation is complex and multivariate and thus both sides are blinkered with too narrow a scope.

The 90%ers are now competing with an international labor pool which is a tough pill to swallow. The 0.1%ers have no obligation to service Americans other than paying taxes, but likewise, the US Government has no obligation to give them special privileges. The Fed focuses on low inflation and not on unemployment, which benefits anyone with wealth, so why not double or triple minimum wage, which would have significant effects on a low-inflation economy, unless of course it put small businesses out of business. Who cares about health care insurance if people don't have any skin in the game in terms of taking care of their own health? Taking health care premiums out of pay will cause low income people to have higher incomes, thus higher taxes but no health care insurance, so isn't the opposite of the desired effect? Let immigrants come, because they'll bring a work ethic with them. Let those without a work ethic suffer. Can't do that because that weakens all of us. Have to set a base line for standard of living. Medicare stupidly pays for hip replacements which mostly wouldn't be needed if people took care of themselves (just one example). If the income differential is the key problem, then why not just give poor people a chunk of money to spend each year, how much, and let the problem be solved? Wouldn't work? Why not? FIx our ghettos once and for all and put people back to work. Oh wait, that's social engineering which we don't do in America. And so on. Complex problem without any likelihood of a solution, especially with our highly charged wedge political scene.
 

CO. Hoosier

Hall of Famer
Aug 29, 2001
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I deliberately over-simplified so I could use Wrigleyed as a joke. My armchair view is that the situation is complex and multivariate and thus both sides are blinkered with too narrow a scope.

The 90%ers are now competing with an international labor pool which is a tough pill to swallow. The 0.1%ers have no obligation to service Americans other than paying taxes, but likewise, the US Government has no obligation to give them special privileges. The Fed focuses on low inflation and not on unemployment, which benefits anyone with wealth, so why not double or triple minimum wage, which would have significant effects on a low-inflation economy, unless of course it put small businesses out of business. Who cares about health care insurance if people don't have any skin in the game in terms of taking care of their own health? Taking health care premiums out of pay will cause low income people to have higher incomes, thus higher taxes but no health care insurance, so isn't the opposite of the desired effect? Let immigrants come, because they'll bring a work ethic with them. Let those without a work ethic suffer. Can't do that because that weakens all of us. Have to set a base line for standard of living. Medicare stupidly pays for hip replacements which mostly wouldn't be needed if people took care of themselves (just one example). If the income differential is the key problem, then why not just give poor people a chunk of money to spend each year, how much, and let the problem be solved? Wouldn't work? Why not? FIx our ghettos once and for all and put people back to work. Oh wait, that's social engineering which we don't do in America. And so on. Complex problem without any likelihood of a solution, especially with our highly charged wedge political scene.

There are indeed a multitude of factors contributing to the problem

But the factors are linked, they don't operate independently.

It has often been said that the single biggest problem with income inequality is education.

"This education gap is a main reason for the growing income divide, and it affects both wages and net worth. From a wage perspective, occupations that typically require postsecondary education generally paid much higher median wages ($57,770 in 2012)--more than double those occupations that typically require a high school diploma or less ($27,670 in 2012). Further, those with a bachelor's degree had a median net worth value nearly twice that of people with a high-school diploma in 1998--climbing to almost 3.5 times greater by 2010 (see chart 3) (23). This difference is even greater higher up the educational ladder."
The education gap is insidious because it builds generation after generation. Of course the educational gap can be blamed on disfunction in many families, communities, and schools. If there is one single area to focus on with addressing the problems of income inequality, it has to start with the area the government can most easily control--education. I think there are glimmers of hope here. The education reform movement is taking hold in many communities, including Denver.

Some useful stuff here:

How Increasing Income Inequality Is Dampening U.S. Economic Growth, And Possible Ways To Change The Tide



 

TheOriginalHappyGoat

Moderator
Moderator
Oct 4, 2010
56,777
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Margaritaville
just the opposite

I want millions of people playing in mostly free and open sand lot fields. Rockfish and the Democrats want millions of people playing in highly regulated and government subsidized Wrigly Fields which can only be supplied by the wealthy and well connected political and business class.
I suppose we can add metaphors to the list of things you don't understand.
 

SSB

Senior
Nov 24, 2001
2,379
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Everyone talks about the GOP's ridiculous field, and rightfully so. But, too few talk about Sanders' nutty rants, unsubstantiated claims and severe misunderstanding of how things work in this country.

NYT graciously allowed for what I consider one of the worst Op-Eds I have ever read:
http://www.nytimes.com/2015/12/23/opinion/bernie-sanders-to-rein-in-wall-street-fix-the-fed.html

I have decided to dissect some of Sanders' statements. If only someone could debate him on these points.

To rein in Wall Street, we should begin by reforming the Federal Reserve, which oversees financial institutions and which uses monetary policy to maintain price stability and full employment.

Notice only the latter two are part of the Fed's mandate.

The recent decision by the Fed to raise interest rates is the latest example of the rigged economic system.
Big bankers and their supporters in Congress have been telling us for years that runaway inflation is just around the corner.


Who specifically is he referring to? Is he confusing Big Bankers with @IU1 and his cult following of ZeroHedge and Peter Schiff?

What went wrong at the Fed? The chief executives of some of the largest banks in America are allowed to serve on its boards. During the Wall Street crisis of 2007, Jamie Dimon, the chief executive and chairman of JPMorgan Chase, served on the New York Fed’s board of directors while his bank received more than $390 billion in financial assistance from the Fed. Next year, four of the 12 presidents at the regional Federal Reserve Banks will be former executives from one firm: Goldman Sachs.

Who understands the financial sector better than those working in the financial sector? Does he understand what a BOD even is?

Board members should be nominated by the president and chosen by the Senate. Banking industry executives must no longer be allowed to serve on the Fed’s boards and to handpick its members and staff.

So, Sanders wants to politicize one of the few independent institutions left in this country? To this I just laugh.Talk about self-serving. He is advocating for more corruption, he just doesn't know it. Perhaps he needs to be reminded how well the SCOTUS nomination procedures work. I'm sure he is a huge fan of Scalia and Thomas and feels they were rightly appointed.

Moreover, it makes you wonder who he would appoint to oversee such a complex area of the economy. We all know how effective lifetime public officials are (see the incompetence of the SEC).

The Fed must also make sure that financial institutions are investing in the productive economy by providing affordable loans to small businesses and consumers that create good jobs.

WTF? Is this a serious statement? Does he remember what the role of the Fed is as previously stated at the top of his own bloggish editorial?

1) He is essentially advocating for the Government to mandate how private institutions lend money. How very communist of him. Perhaps he never read all of the stories of failure with the SBA, USDA, etc.

2) Providing affordable loans to riskier businesses goes against the risk-taking that he proposes in this publication! It goes against Dodd-Frank, the pile of legal restrictions and regulations that Sanders supported.

How? First, we should prohibit commercial banks from gambling with the bank deposits of the American people

Um... the Volcker Rule, part of the D-F bill Bernie voted for, is already in effect. On top of that Basel requirements are more stringent.

Second, the Fed must stop providing incentives for banks to keep money out of the economy. Since 2008, the Fed has been paying financial institutions interest on excess reserves parked at the central bank — reserves that have grown to an unprecedented $2.4 trillion.

What? Does he understand what excess capital requirements means? This is part of the regulation that Bernie voted for.

Third, as a condition of receiving financial assistance from the Fed, large banks must commit to increasing lending to creditworthy small businesses and consumers, reducing credit card interest rates and fees, and providing help to underwater and struggling homeowners.

What the hell is wrong with this guy? This is exactly the type of lending that caused the financial recession and the type of behavior that Bernie himself is ridiculing. Now he wants the banks to make risky loans to those that shouldn't be allowed to get credit? Just makes you wonder if he has an IQ above 100.

We also need transparency. Too much of the Fed’s business is conducted in secret, known only to the bankers on its various boards and committees. Full and unredacted transcripts of the Federal Open Market Committee must be released to the public within six months, not five years, which is the custom now.

Unless I am missing something, FOMC minutes are provided within weeks after the meetings, not 5 years. Did he even bother to check these? Don't even answer that question.

http://www.federalreserve.gov/monetarypolicy/fomccalendars.htm

We must reinstate Glass-Steagall and break up the too-big-to-fail financial institutions that threaten our economy.

So would he repeal D-F since there are substantial amounts of overlap? Also, did someone inform Bernie that Bear and Lehman were investment banks only and G-S would have had zero impact on their failure?

In sum, it's pretty sad that this guy has so much support and that the ignorant American public and media (thanks NYT) doesn't even bother to fact check the rhetoric they want to hear. Just goes to show you that it isn't just the far right that has nutjobs and endangers the country.



It should be expected. Over the last 50 years the growing middle class became the shrinking middle class. What do you think is going to happen? The top 1% control more and more of the wealth. At some point it is inevitable, politicians will pander to this shrinking segment. Were you under the impression that politicians always made their points in a balanced manner?
 

Rockfish1

Hall of Famer
Sep 2, 2001
36,245
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There are indeed a multitude of factors contributing to the problem

But the factors are linked, they don't operate independently.

It has often been said that the single biggest problem with income inequality is education.

"This education gap is a main reason for the growing income divide, and it affects both wages and net worth. From a wage perspective, occupations that typically require postsecondary education generally paid much higher median wages ($57,770 in 2012)--more than double those occupations that typically require a high school diploma or less ($27,670 in 2012). Further, those with a bachelor's degree had a median net worth value nearly twice that of people with a high-school diploma in 1998--climbing to almost 3.5 times greater by 2010 (see chart 3) (23). This difference is even greater higher up the educational ladder."
The education gap is insidious because it builds generation after generation. Of course the educational gap can be blamed on disfunction in many families, communities, and schools. If there is one single area to focus on with addressing the problems of income inequality, it has to start with the area the government can most easily control--education. I think there are glimmers of hope here. The education reform movement is taking hold in many communities, including Denver.

Some useful stuff here:

How Increasing Income Inequality Is Dampening U.S. Economic Growth, And Possible Ways To Change The Tide



There are things I agree with and things I disagree with in the S&P piece you linked, but I'm puzzled by your source. Who would look to Standard & Poors to explain anything, let alone to explain income inequality? S&P failed in its fundamental mission to rate the credit-worthiness of securities when (like all the other ratings agencies) it compliantly slapped AAA labels on the junk securities that almost brought down the global economy in 2008. Also, it absurdly downgraded the credit-worthiness of the United States government, even though global investors all regard US Treasuries as the safest investment in the world. When I want to learn about income inequality, I look to people who study that subject, not to a discredited scandalized ratings agency.

Nevertheless, that written-by-a-committee piece includes much of what I've said about income inequality. In particular it confirms that the problem has arisen because incomes at the top of the distribution have soared away from everyone else -- a point you do or don't deny, depending on the post. But you've cherry-picked from it what is perhaps its most dubious assertion: that income inequality has arisen because the top 1/0.1 percent of us have grown that much more educated than everyone else. That's almost certainly wrong.

This is a specific illustration of a more fundamental misconception of what's driving income inequality. It assumes that the wealthiest among us are soaring away because they've become that much more worthy than everyone else. From this adulatory perspective, the question is how to increase the worthiness of the rest of us poor dumb schlubs.

But what if they're soaring away from the rest of us because they're gaming the system -- or more accurately changing the system to their benefit? Because those who study this problem increasingly think that this is exactly what's happening.

By all means let's educate people better, but the norms and institutions of our society -- including the implicit assumptions we make about how the world works -- have all become geared to redistribute income upward, regardless of education, skills, or worthiness. You won't learn about any of that by reading Standard & Poors. But you will learn about it by reading the people who actually study this subject, whose work I routinely link. And maybe -- unlikely, but maybe -- you'd learn that the wealthiest among us aren't soaring away on their superior virtue.
 
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CO. Hoosier

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But you've cherry-picked from it what is perhaps its most dubious assertion: that income inequality has arisen because the top 1/0.1 percent of us have grown that much more educated than everyone else. That's almost certainly wrong.

Read the link and my post again

There are a number of things that affect income distribution including the superstar compensation packages of the top .1%. But that isn't the result of the education gap. I don't know why you think that was said. The point is, that of all the things that do affect the gini index, the education gap is the single most important and it is also the one factor that government has the ability to address.

By all means let's educate people better, but the norms and institutions of our society -- including the implicit assumptions we make about how the world works -- have all become geared to redistribute income upward, regardless of education, skills, or worthiness.

This is indeed true

The implicit assumption is that the ACA would benefit all of us, including those with pre-existing medical conditions who could only get insurance in some cases. But a spinoff from the ACA is to cause more part-time workers as the full time employment ranks were cut to escape the ACA mandates. Result: More income for the employer less for the employees and more inequality.

The implicit assumption of Dodd Frank was that more banking regulations would cause fewer failures and which is better for all of us. The result is that those regulations, including the "know your customer" rules, cut out thousands of small businesses and startups from access to financing. The result, the big get bigger and richer and the rest of us work for the MAN.

The implicit assumption is that liberal immigration policy, including encouraging illegal immigration and human trafficking is good for . . . . .well I guess the immigrants and people who want their support. The result is that more Americans are out of work, wages are suppressed, and the education gap widens. The rich get richer on the backs of immigrants while more people don't work or work in low pay jobs.

So yeah, there are a number of things to do to fix income inequality, but it will cost political capital, and that is the most precious commodity of all for those who make the rules.
 

SuperHoosierFan

Hall of Famer
Aug 1, 2003
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Taking the graph at face value

The far left side shows everything at 0. So we know the graph is not intended to measure the distribution of people, nor the distribution of income. The lines separate based upon the percentage growth of the subject of each of the lines. What the lines represent is self explanatory; it is the rate of growth in income of the various strata. It is not the actual growth of incomes in each strata. It shouldn't be too hard to figure out that the growth can be skewed by the number of earners in each group. So, if the number of people in the upper .1% double, and the income stays the same, the upper .1% will show a 100% increase. Much better, and more meaningful would be to show the growth of actual per capita income in the upper .1%, or even the actual income levels that comprise the upper .1% instead of the rate of its growth.

Maldistribution of income is indeed a serious problem. This graph doesn't show how serious the problem is, or what is driving the widening inequality. All we know is that it has gotten measurably worse under Obama and with the QE the FED used to help bail out Obama's crappy recovery. I think it is pretty clear that the monetary policy helped the hedge funds and the others on Wall Street while the immigration policy screwed the unskilled workers. Once you throw in the huge impediments built into our social system that restricts upward mobility, and the power and influence of outfits like Goldman Sachs and its ownership of people like Dodd, Frank, Obama and Clinton, there isn't too much of a mystery about how income inequality is getting worse.

The Democrats offer nothing but stupid graphs that attempt to show the inequality problem while mumbling something about this being all Bush's fault because of the housing bubble.

You can't even pretend to be reading this chart. You don't even know where zero is. If the chart started at zero, the little line would start in the bottom left corner. That's the 90 degree angle between where it says "0%" and "1979".
 

iuwclurker1

All-Big Ten
Dec 19, 2015
4,684
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There are things I agree with and things I disagree with in the S&P piece you linked, but I'm puzzled by your source. Who would look to Standard & Poors to explain anything, let alone to explain income inequality? S&P failed in its fundamental mission to rate the credit-worthiness of securities when (like all the other ratings agencies) it compliantly slapped AAA labels on the junk securities that almost brought down the global economy in 2008. Also, it absurdly downgraded the credit-worthiness of the United States government, even though global investors all regard US Treasuries as the safest investment in the world. When I want to learn about income inequality, I look to people who study that subject, not to a discredited scandalized ratings agency.

Nevertheless, that written-by-a-committee piece includes much of what I've said about income inequality. In particular it confirms that the problem has arisen because incomes at the top of the distribution have soared away from everyone else -- a point you do or don't deny, depending on the post. But you've cherry-picked from it what is perhaps its most dubious assertion: that income inequality has arisen because the top 1/0.1 percent of us have grown that much more educated than everyone else. That's almost certainly wrong.

This is a specific illustration of a more fundamental misconception of what's driving income inequality. It assumes that the wealthiest among us are soaring away because they've become that much more worthy than everyone else. From this adulatory perspective, the question is how to increase the worthiness of the rest of us poor dumb schlubs.

But what if they're soaring away from the rest of us because they're gaming the system -- or more accurately changing the system to their benefit? Because those who study this problem increasingly think that this is exactly what's happening.

By all means let's educate people better, but the norms and institutions of our society -- including the implicit assumptions we make about how the world works -- have all become geared to redistribute income upward, regardless of education, skills, or worthiness. You won't learn about any of that by reading Standard & Poors. But you will learn about it by reading the people who actually study this subject, whose work I routinely link. And maybe -- unlikely, but maybe -- you'd learn that the wealthiest among us aren't soaring away on their superior virtue.
I'm not an economist but I can follow a discussion pretty well. The problem I have with your rationale and that of Indiviglio and Mishel, at which point I stopped following the links, is that you're all setting up strawmen to shoot down. Basically, you all present a presumably opposing position in an all-or-nothing and/or distorted manner. Examples:

Rock: "But you've cherry-picked from it what is perhaps its most dubious assertion: that income inequality has arisen because the top 1/0.1 percent of us have grown that much more educated than everyone else."

Dubious assertion: "Indeed, while recent advances now require many workers to have graduated from college, the supply of college-educated workers hasn't kept up with demand--and even the fraction of high school graduates has stopped climbing.

This education gap is a main reason for the growing income divide, and it affects both wages and net worth.
"

Fact-check conclusion: Rockfish1 incorrectly translated the notion that many workers are under-educated to the notion that "the top 1/0.1 percent of us have grown that much more educated than everyone else."

Indiviglio: "In fact, it's pretty easy to see that education isn't the answer to solving the unemployment problem if you make one key assumption: the unemployment problem is cyclical, not structural."

Comment on Indivglio: "The" answer? What rational actor on the stage of life is saying education is the answer to unemployment? Strawman alert!

Mishel: "...it is becoming common to hear in the media and among some policy makers the claim that lingering unemployment is not cyclical but “structural.” In this story, the jobs problem is not a lack of demand for workers but rather a mismatch between workers’ skills and employers’ needs."

Comment on Mishel: Either cyclical or structural? Either a demand for workers or a mismatch? Again, what rational actor on the stageof life would view the complex problem of unemployment as an either-or proposition? Strawman alert!

~~~

What I took away from the S&P post is that there are many factors contributing to a high GINI coefficient, with this chart showing some:

getImage.do


and that there are many factors contributing to the highest of those -- income inequality. Of the income inequality factors, some relate to individuals and some relate to society more generally. One of the key factors for individuals is their degree of education. This should be a no-brainer if one views individuals on the education continuum as somewhere between the two extremes of troglodyte and Rockfish1.

Another takeaway for me is that a pragmatic goal would be to shift the GINI coefficient downward to some degree. Since economics tends to view economic growth as an ideal state, the question becomes how to shift the GINI downward while growing the economy? That can be re-stated as how to maintain economic equilibrium without dampening the creative and ingenious growth factors? Clearly the playing field has to be as fair as possible, so norms, institutions, laws, and the like that aid only the richest have to go. At the same time, it's not pragmatic to negatively affect the job creators in our economy, for self-defining reasons. Helping individuals that appear to be least effective in the economy, however you define effective, seems to satisfy both conditions of shifting the GINI downward (to whatever degree) and growing the economy, while also not negatively affecting the job creators, so that's a positive. So education or job training or however society decides to characterize and manifest "societal personnel enhancement" is one significant factor to address. It also has the corollary benefit of potentially reducing society's TROGLO coefficient, although research on that appears to be anecdotal at best.
 
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IU1

Hall of Famer
Apr 3, 2002
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From which many of us will never recover?

Talk about waaaaaaaaaaaaaaaay over dramatic. Most people were fine within 2 years. If you haven't recovered from 2008 in 7 years, you probably weren't going to make it regardless of what happened.

Maybe I'm misunderstanding your point though since you're so much smarter than everyone.
A dumb post. Did you think the economy "was back" in 2010? A lot of people lost good jobs and businesses over the last 30 years and if we don't change the way we do business in this country all or corporations will be gone and we will have nothing. How's the view from the mountain top?