Not The Best of Times Because, Why?
Kevin Drum posts this chart as a one-picture refutation of McCain's statement that we are living in the best of times.
Um, OK. We all got wealthier. And the problem is, what? That someone else got even wealthier than I did? So what. Do we really have to keep refuting this zero-sum economics-of-envy argument?
I won't get into the whole zero-sum thing, because the chart itself proves that the world can't be zero-sum, since everyone got richer on average. But here is a full refutation of zero-sum wealth arguments. Also, a zero-sum wealth quiz here.
Looking at changes in income brackets is
always misleading. In the US, most folks are migrating up the brackets
as they age and gain experience. So most folks benefit not just from
the increase in their bracket but a migration to the next bracket.
To this last point, the bottom end of the bracket is being flooded
with new immigrants (legal or not) with poor skills and often no
English. They drag down the averages, again understating how well the
typical person is doing. Lifetime surveys of individuals rather than percentile brackets always demonstrate that individuals gain wealth over time much fast than this type of analysis demonstrates. And even the new immigrants at the bottom are presumably gaining vs. their previous circumstances, or else why else would they have immigrated in the first place.
Here is an alternate response to whether we are in the best of times.
By the way, here is an interesting article on why using a single inflation rate for the poor and the rich to get real income growth may be incorrect. There is an argument to be made that the poor have a lower inflation rate than the rich, thanks to Wal-Mart.
Jay:
There are lies, damn lies and then there are statistics!
August 13, 2008, 1:27 pmEsox Lucius:
Dear God, why do they always say it like "Income Flowing to" or "Income Received" or "Income Distributed"??? I swear, I have never had income flow to me, or received it from anyone, or was distributed income. Always, always, it was earned.
I think it is just easier for them to wrap their heads around the thought that this income thing is all a scam and that you need to find the angles and play the angles.
August 13, 2008, 2:39 pmMark:
One of the most ridiculous things that the Left does is continue to report the stagnant income of the "lowest 20%" or whatever level of poverty they are trying to decry.
Notice one thing, they report "income" that is narrowly defined as earned income. The real fact is that since 1970 the real CONSUMPTION of the lowest income groups has increased significatnly.
For example, in 1970 the lowest quintile income group had a reported real ($2002) income of $8719 as compared to the same statistic in 2002 of $8,316. All of the leftist are screaming that for the poor people income has declined by 4.6%.
However, comparing reported household consumption of the same groups showed that from 1970 to 2002 that their real CONSUPMTION increased from $12,166 to $19,061. The 56% increase in household consupmtion is explained by the fact that income measures ignore all of the benefits that these lower income groups receive from the government.
This is the reason that despite stagnant or declining incomes the poor are much more materially better off than ever before, and the fact is that most of it comes from the benevolence of the American tax payer. And for that, the Left responds how???
August 13, 2008, 3:14 pmdave smith:
The plural of anecdote is not data, Jay.
No mater how you slice the data, conditions are improving across the economic spectrum.
August 13, 2008, 3:47 pmMesa Econoguy:
And, lest we forget, we currently (2006 data) have 43 million people not paying any income taxes at all…
August 13, 2008, 4:05 pmSteve:
Let's discuss inflation rate for a second.....Is it the CPI which excludes food and energy costs? Or what? This makes all the difference in the world. Does this rate include inflation of health care costs? Any statistic like this that doesn't include a discussion of inflation rate methodology is total bullsh*t.
Another point worthwhile is that if our wealth increases a few percentage points while the dollar drops 40%, we have gotten a lot less wealthy than our Euro zone neighbors.
August 14, 2008, 7:24 amYoshidad:
This post is fairly typical of the kind of delusion denial commonly found in this blog. I've debunked it before, and here's a link to the full debunk: http://www.pkarchive.org/economy/therich.html. Read it and get back to me.
The technical term for idea that the rich have been suffering is "bullshit."
The truth is that for the last 30 years (since Reagan), real wages have remained relatively flat while, for example, the top 0.01% of income receivers (can you really "earn" by clipping bond coupons?) have received a 497% raise.
Put another way: U.S. workers have been measurably more productive, but the fruits of those productivity increases for the last 30 years have gone largely to the very tippy top of the elite and wealthy.
Posters here believe that the press reporting this is left-leaning, but can't find a single daily paper in the U.S. with, for example, a labor section of similar size to the business section, if it exists at all. Yeah, the media is lefty all right...
And the poor rich people, carrying so much of the tax burden while 43 million don't pay income tax, seem to have forgotten that between the tax increases foisted off on the general population by Reagan and Bush 41 (Reagan alone signed eight such tax increases), that those 43 million are now paying four times as much in the doubly regressive FICA (social security) taxes.
This meme that the rich have been suffering would be laughable if it weren't so widespread. Personally, I chalk it up to mental illness (not that I'm so sane and superior). Or the kind of junkie logic that lets posters here continue to believe that we must all kowtow to their petroleum addiction.
Think of this as an intervention.
August 14, 2008, 11:49 amJody:
The technical term for idea that the rich have been suffering is "bullshit."
Strawman.
The truth is that for the last 30 years (since Reagan), real wages have remained relatively flat while
According to Kevin Drum's cited statistics (in this post), they went up 5% from 02-06.
August 14, 2008, 12:27 pmunbeholden:
Are you seriously lumping 90% of people together to comprise that 4.6% increase? I suspect that the folks between, say, 70% and 90% are still, relatively speaking,considered higher wage earners.
How much of this 4.6% can be attributed to them? How much to the 50% to 70% grouping. And finally, whats left when you split out any groupings below the 50% middle? Does it at some point below 50%, in fact, go negative?
Care to break this out so we can see what the bottom 50% come away with? After all, they do represent half of all wage earners!
Sorry, but this is a very questionable use of statistics. It makes me wonder about the honesty, if not capacity, of the author.
PS, I'm a middle of the road guy politically, and have voted both Republican and Democrat in the past-just FYI.
August 14, 2008, 12:37 pmunbeholden:
PS, above I am referring to the USE of the chart to make your argument. It doesn't matter who presented the chart first, or in what context.
August 14, 2008, 12:43 pmYoshidad:
Jody, do me a favor, and read the link cited in the original post rather than quibbling. Leave the quibbling to me!...8^)
From Wikipedia: Bullshit: "Most commonly, it describes tautological, incorrect, misleading, or false language and statements.... Bullshit is commonly used to describe what often occurs in situations where truth and accuracy are far less important than the ability to achieve a suitable response in the audience, often needed in politics, religion or advertising. In many cases, such a response helps to gain popularity or favor."
That's not a straw man, that's a definition that accurately describes the original post. The "suitable responses" it attempts to elicit are the faux indignation about how the rich people are suffering at the poor's expense, and the sense of entitlement synonymous with insufferable arrogance. In light of the real situation -- poor people might have minor gains, but the rich have had huge ones -- these responses amount to straining at a gnat while swallowing a camel, my whited sepulchres.
And when real wages rise by 5% vs. 497% for the top 0.01% of incomes, then the words "relatively flat" accurately describe 5%. I leave it to you to look up the word "relatively."
See Real Wages Fail to Match a Rise in Productivity from August 2006 for more specifics. One excerpt: "The median hourly wage for American workers has declined 2 percent since 2003, after factoring in inflation. The drop has been especially notable, economists say, because productivity — the amount that an average worker produces in an hour and the basic wellspring of a nation’s living standards — has risen steadily over the same period."
For the graph, see here.
One additional argument: If we become a nation of really rich people, and really poor people, there's a chance that the rich people won't have the information it takes to guide our civilization to survive. Jared Diamond's "Collapse: How Societies Choose to Fail or Succeed" documents how such income disparities led to the collapse of the civilizations (the Norse in Greenland, who refused to adopt Inuit technology, for example).
August 14, 2008, 12:51 pmYoshidad:
I tried putting the links in the previous post in standard HTML, but they don't work. Here they are in plain text:
http://www.nytimes.com/2006/08/28/business/28wages.html for "Real Wages Fail to Match a Rise in Productivity"
For the graph, see http://www.nytimes.com/imagepages/2006/08/38/business/28wages_chart.html
August 14, 2008, 12:55 pmJody:
Yosh: 1) I said "Strawman" because no one is making the argument that "the rich have been suffering". Since you were so kind to link to the wiki BS entry for me, here's the wiki entry for strawman.
2) A 5% real gain in 5 years is flat according to you. Ok. Don't be surprised when others disagree. Especially while you're effectively proving Warren's second point. (That the Left will claim decline because of an increasing gap between top and bottom while missing the fact that all improved.)
3) Speaking of which, did you understand the first point of the post?
Kevin Drum says that McCain is wrong that we're living the best of times and insists that the average Joe is worse off. To prove this, he cited a chart that showed that *everyone* is better off, thereby effectively disproving his own point.
So Drum's obliviousness to the fact that his data contradicted his own argument was just awe-inspiring - a characteristic also exhibited by many of his commenters as several insisted that despite the 5% gain, the effects were swamped by inflation (The title of the chart says "adjusted for inflation".)
Now it is reasonable to wonder how that 4.6% gain was spread out among the bottom 90% as unbeholden asked. It would also be reasonable (as I noted in Drum's comments) to wonder if the more recent inflation and slower growth has reduced or eliminated these gains. To determine that, a different set of data would be needed which would mean much more work than simply noting that Drum pulled a boner.
August 14, 2008, 1:36 pmMesa Econoguy:
The economic term for Yoshalist's posts is "horseshit."
Yoshalist’s assertions above (and most likely parroted by the NYT, an inaccurate economic source) are incorrect, as usual.
No, real wages and incomes have not been flat.
Incomes have not been stagnant since the 1970s.
Further, not only is real compensation up, average weekly hours worked is down, and our overall standard of living has vastly improved, particularly over the past 30 years.
Liberals yelling about Social Security (and the deficit) is like pyromaniacs complaining about fire department response time. While I'm in total agreement that FICA is a ridiculous tax, who, exactly enacted Socialist Security, and Medicare, and Medicaid......?
Oh, it was Democrats.
August 14, 2008, 4:36 pmKyle Bennett:
Migration between brackets, in both directions, renders any information gleaned from this chart invalid, to the point where it could appear to show just the opposite of what is actually happening.
Any given bracket at time t + x is comprised of different individuals than it was at time t, and, at any given time t + x, the number of individuals in any bracket has changed from time t. The basic assumption of the chart is flawed, as the comparisons are apples to oranges.
For instance, if the bottom ten percent of the people in the top bracket get "downsized" or otherwise lose income, and so move to a lower bracket, the average income for that high bracket will increase dramatically, even if the incomes of those remaining in the bracket have not changed at all, or even possibly decreased. Similarly, if the the top ten percent of the lower bracket move into a higher one, the aggregate income in that bottom bracket will drop dramatically.
There is no useful information to be had from this chart. Even the observation of a universal increase is fallacious. It could theoretically be consistent with a downward migration from all brackets to the next lower one, and from the bottom bracket to unemployment.
Of course, it's perfect for socialists, since they only see classes and not individuals. It's handy lie used to support their more fundamental lies.
August 14, 2008, 5:39 pmMesa Econoguy:
Kyle is correct, because these aren’t the same people.
[This fallacy underlies nearly all the left-wing income inequality propaganda.]
August 14, 2008, 6:02 pmMesa Econoguy:
I tried putting the links in the previous post in standard HTML, but they don't work.
Posted by: Yoshidad
Gosh, I wonder why…….?
August 15, 2008, 12:12 amLes:
I've been hearing alot of a new field of study called 'Evolutionary Psychology', or basically 'What would Ogg the Caveman Do?' This field seeks to explain the often counter-intuitive and irrational responses many people or groups of people have in modern society by putting it into context of learned behaviors passed down through generations among hunter-gatherer tribes.. which comprises the majority of human history.
Wealth-disparity, why is it such a big deal? We live in an era where the lowest rungs of society live in conditions that the lowest rungs over a century ago would've considered palatial, and with amenities the richest of the rich during the 'robber-baron' era would've considered un-imaginable luxuries.. so what's the big deal if Donald Trump adds a few extra zeros to the end of his net-worth at the end of the year then you do?
Well it was a big deal back in the time of Ogg the Caveman. Say Ogg was helping with the Mammoth Hunt. He helps track the Mammoth, he helps herd it into a corner where they can go in for the kill, he even helps butcher the Mammoth and cart the Mammoth-bits back to the village when it's all done. He, and everyone else in the village, all get the same share of the Mammoth meat.. except one.
Ugg the Caveman gets meat but since he stood-up, clanged his big brass ones together, and then personally stabbed the Mammoth in the eye with a pointy stick he then gets to keep the tusks. No problem, right? Ogg is still getting the same amount of Mammoth Steak as Ugg. Stabbing the Mammoth in the Eye is the most dangerous part of the Mammoth Hunt, and it's not like you can eat Mammoth Tusks. Ogg should be happy for Ugg, right?
But he's not, Ogg is resentful of Ugg and his Mammoth Tusks because those Tusks represent a wealth disparity. They are a huge Status Symbol, letting all the village know he has Big Brass Ones, which makes most of the cavewomen want to come to Ugg's hut so he'll use those Big Brass Ones to make Big Strong Babies with them. But all it takes to get the Tusks is to go 'Ugh, Ogg Volunteer' next time they need someone crazy enough to stab a Mammoth in the forkin' EYE with a pointy stick, then Ogg can get Tusks of his own so he can get laid more.
Now we come to the modern age in this country, an age where the lowest rungs can still live a reasonably long and reasonably healthy life compared to previous generations, and a reasonably comfortable and happy life is just a few rungs higher... but, the top-most rungs are getting farther and farther away. It dosn't matter that you're likely Never, Ever, Ever going to meet 'The Donald' because Ogg the Caveman still considers him competition for your nookie. With those top rungs looking more and more like an impossible climb what're the folks with an unusually loud Ogg in the backs of their brains to do? Simple, break the ladder.
August 15, 2008, 5:28 amBilly Beck:
"The
economicethical term for Yoshalist's posts is 'horseshit.'"There. I fixed it for you.
Never -- ever -- engage a moron like that on utilitarian premises.
August 15, 2008, 6:26 amBilly Beck:
(closed tag)
August 15, 2008, 6:27 amWill H.:
I've been in the bottom 5% and the top 5%, I've been poor but never wealthy. Income is not equal to wealth.
My wife and I received $300 earned income tax credit in 1978 (but it went to pay FICA since I was considered self employed at that time) and paid the high of $48,789 in Federal taxes (does NOT include state, local, property, sales, excise, FICA, medicare) in 2005. We drop $35,000 in income from 1999 to 2000 and doubled our income from 2003 to 2004 (our federal income tax tripled.) We drop $31,000 from 04 to 05 and then dropped again by $98,000 from 05 to 06. In 34 years we average 16.1% of income in federal taxes.
I've worked for $1.00 per hour made $8 for the day and worked for $100 per hour as a independent contractor with no benefits.
Income is not wealth.
Income and wealth are not the same. Ted Kennedy only has his senator salary < $200K per year but he is a wealthy man.
People also fall out of the top income all the time. Look at many professional athletes, who once were multi millionaires but now are broke. Ed McMann house when into foreclosure until Donald Trump bought it and lease it back to him. Fortunes are made and lost all the time.
I've moved in and out of different income groups all my life.
When my daughter and son-in-law started out they was in the bottom 10% but as they graduated from college they moved up into the top 15%
My son and wife are just starting out and they are in the bottom also, but I predict they will move up also.
My Mother and Father never made it to the top but they worked hard, saved and now with my dad gone my mother has moved into the bottom again from an income point of view. However, she is more than OK, no home payment, she sold the house to me and I pay her every month and she lives in the house, she has saving, cars, furniture and everything she needs, but here income is low but not her wealth.
August 15, 2008, 6:58 amOliver:
I wonder what country Kevin Drum thinks is offering better times? If he named one it would probably reveal a chart where the everyone was worse off but more or less equally worse off.
It's too bad everyone can't be rich.
But maybe Kevin Drum would prefer that if everyone can't be rich, that no one is rich. I was once poor and given the choice between a country where some are rich and one where none are rich, I certainly would not have preferred the latter since I would have known that is a choice to stay poor forever.
August 15, 2008, 7:32 amMethinks:
It's too bad everyone can't be rich.
Compared to the rest of the world, all Americans are rich.
August 15, 2008, 10:52 amlrC:
The amusing question is to ask Drum et al when were the better times? Every time someone waxes nostalgic about his own concept of "good old days", the welfare liberals have no shortage of reasons why those days were not as good as right now.
August 16, 2008, 7:18 amYoshidad:
First, my apologies to Jody. Warren does not say that the rich are suffering -- my bad for attempting to use sarcasm and shorthand. He actually says, in effect, that everyone is enjoying the "higher pie" of economic benefits, so why are these poor people such whiners? After all, the poor are living far better than even medieval aristocracy. What is their problem? And sure, some people might be poor, but that is only temporary, but that income mobility takes care of everyone in the long run, at least *before* they die.
Make no mistake. This is part of a long-running attempt by the truly reactionary right to paint all this income kerfuffle as a tempest in a teapot. Again, this is the complete debunk of this meme.
This debunks the myth of income mobility. An excerpt:
"The other day I found myself reading a leftist rag that made outrageous claims about America. It said that we are becoming a society in which the poor tend to stay poor, no matter how hard they work; in which sons are much more likely to inherit the socioeconomic status of their father than they were a generation ago.
"The name of the leftist rag? Business Week, which published an article titled "Waking Up From the American Dream." The article summarizes recent research showing that social mobility in the United States (which was never as high as legend had it) has declined considerably over the past few decades. If you put that research together with other research that shows a drastic increase in income and wealth inequality, you reach an uncomfortable conclusion: America looks more and more like a class-ridden society. "
..."According to estimates by the economists Thomas Piketty and Emmanuel Saez--confirmed by data from the Congressional Budget Office--between 1973 and 2000 the average real income of the bottom 90 percent of American taxpayers actually fell by 7 percent. Meanwhile, the income of the top 1 percent rose by 148 percent, the income of the top 0.1 percent rose by 343 percent and the income of the top 0.01 percent rose 599 percent. (Those numbers exclude capital gains, so they're not an artifact of the stock-market bubble.) The distribution of income in the United States has gone right back to Gilded Age levels of inequality.
"Never mind, say the apologists, who churn out papers with titles like that of a 2001 Heritage Foundation piece, "Income Mobility and the Fallacy of Class-Warfare Arguments." America, they say, isn't a caste society--people with high incomes this year may have low incomes next year and vice versa, and the route to wealth is open to all. That's where those commies at Business Week come in: As they point out (and as economists and sociologists have been pointing out for some time), America actually is more of a caste society than we like to think. And the caste lines have lately become a lot more rigid. "
August 16, 2008, 9:51 amYoshidad:
Despite Drum's stats that show "everyone" is better off, note that the stats cited above cover a much longer period and show a real decline in income for that lower 90%. So "The left is never satisfied"? Could it be that they're in touch with reality on planet earth? Could Warren be disingenuous in trying to show that lower-income people are whiners by nit-picking Drum's point? Gee, I wonder!
Mesa Econoguy cites census data that demonstrates rising incomes. What he omits mentioning is the word "real" in that phrase "real income." If you correct for inflation, then Piketty, Saez, and CBO figures show no such income rise, as Krugman notes above.
The "evolutionary psychology" post from Les is fascinating. There is actually some class envy, I'm sure. There's also a case to be made for keeping the rich in touch with conditions for the poor for the sake of civilization's survival. See Jared Diamond's "Collapse: How Societies Choose to Fail or Succeed "
When would better times be? Perhaps it would be when U.S. economic growth was strongest. That's the 1950's and '60's when marginal tax brackets for high income people were as high as 92%. Perhaps it would be when public policy created the most jobs. For a look at that, consider this chart:
President Total Job creation (millions) Â Private sector job creation (millions)
Reagan (1981 - 1988) Â Â 14.8Â Â Â Â Â 13.7
Bush I (1989 - 1992)Â Â 3.4Â Â Â Â Â 2.0
Clinton (1993 - 2000)Â Â 23.1Â Â Â Â Â 21.2
Bush II (2001 - 2005)Â Â 1.7Â Â Â Â Â Â 0.7
Source: bureau of Labor Statistics, 2007, http://www.bls.gov; Dick Alexander, http://www.globalshop.com cited in Ravi Batra's "The New Golden Age" (p.109)
Notice that the Clinton raised the top income tax brackets, and contrary to the Reaganites and supply-side witch doctors... er, I mean voodoo economists' assertions that this would lead to economic meltdown, produced many more jobs.
...and yes, I still say it's bullshit.
August 16, 2008, 9:52 amKyle Bennett:
Yoshi's logic is circular. As evidence "debunking" the idea that income mobility invalidates the kind data presented in the chart, he cites an article that uses that same form of data.
To the extent that mobility is diminishing, an hypothesis that no one here has made a serious effort to prove or disprove, history tells us that the single greatest factor likely to cause it is government interference in the economy. Those programs to help the poor do help the poor to become marginally better off, at the expense of tending to keep them among the poorest bracket of income earners. Taxes, while disproportionally paid directly by the highest earners, tends to disproportionally hamper the efforts of the poor to better themselves. And entitlement programs, unions, minimum wage, business regulation, and the like all hurt almost exclusively the mobility of poor and lower middle classes.
Income mobility, at least by anecdotal evidence partly supported by official statistics, is still quite high in this country, especially when compared to most other countries. The greatest threat to that is the socialist's vicious and barely masked attempts to keep poor people "in their place", that place being one of desperation, depravity, disillusionment, disenfranchisement, and jealousy. In other words, the perfect constituency to support the socialist's naked grabs for power they try to claim they need as the solutions for problems they deliberately caused.
August 16, 2008, 10:55 amfoxmarks:
Seems like Yoshi doesn't grasp the meaning of "debunk" either. Krugman prattled that income mobility doesn't happen much once people reach their 30s. Which may be a fact without any significance. Once trained and settled in a career with a family, people don't spend much wealth on further skill-building or take entrepreneurial risk. Wow. Is this earth-shattering news which demands corrective coercion?
Maybe we should count offspring as a capital asset. Rather than building their own earning power, people seem to like creating new earning power in the form of new humans. The investment in child-rearing makes the per-person income appear to grow more slowly. Let's build robots instead of babies and we'll all be rich!
Only the rich have time to lump people into classes so they can borrow angst. Somebody must be suffering...let's find a way to ignore the individual cases (and choices) to demonstrate that people are different and life isn't fair. Complaining about income equality is a luxury. To me, it makes the whole issue moot. If you're rich and complaining about income for somebody else, you're a phony. If you're poor and complaining about your income relative to somebody else, a) you're rich enough to complain--so shut up; and, b) shut up and build your skills.
Each person is in charge of his own income mobility. Who cares what the guy down the block or in the next town is doing? Why not focus on helping some distinct individual person you deem an "inequality victim" to increase his earning power? Don't use your wealth to buy thugs to take my wealth and give it away. Use your wealth to help those you think are suffering. And shut up about it.
August 16, 2008, 10:58 amMesa Econoguy:
Mesa Econoguy cites census data that demonstrates rising incomes. What he omits mentioning is the word "real" in that phrase "real income." If you correct for inflation, then Piketty, Saez, and CBO figures show no such income rise, as Krugman notes above. Posted by: Yoshidad | Aug 16, 2008 9:52:36 AM
From the Census data I cite:
Income in current and 2006 CPI-U-RS adjusted dollars
The income numbers do correct for inflation using an index which probably overstates inflation by about 1.2% per year for the last 10 years. They don’t include employer contributions to healthcare or retirement, which understates total income.
Learn how to read, idiot.
August 16, 2008, 12:13 pmSolar Lad:
When would better times be? Perhaps it would be when U.S. economic growth was strongest. That's the 1950's and '60's...
LOLOLOLOLOLOLOLOLOLOLOL
Yeah, the 50s and 60s, when the average number of vehicles per household was under "1", (and those autos had no seatbelts), when the average home size was under HALF of what it is now, when medical
care featured a lot of dyin', when a NYC-to-LA phone call cost the equivalent of $ 10/min, when people wore formal attire to travel by plane and all airline tickets cost the equivalent of today's "first class" fares, when there was a standing military draft and the Cold War was always threatening to go hot and destroy the civilized world, the era of "Jim Crow", a time when blacks couldn't vote in many states and minorities and women were routinely denied access to many institutes of higher education, particularly professional post-grad schools, and many jobs, including most of the highest-paid or executive...
Panglossian nostalgia is no substitute for facts. That hardly seems like a better era from a standard-of-living perspective, and additionally, publicly naming such racist and misogynist times as a "golden era" provides an unwelcome and appalling insight into a troubled mind.
And the poor rich people, carrying so much of the tax burden while 43 million don't pay income tax, seem to have forgotten that [...] those 43 million are now paying four times as much in the doubly regressive FICA (social security) taxes.
While FICA is regressive, a) the lowest income-earners receive the EITC, which more than makes up for FICA, b) who benefits most from SS, the poor or the rich ?, and c) most of the "poor rich people" pay FICA too, in addition to Federal income taxes, and since more high than low income-earners are self-employed, they're more likely to be paying DOUBLE the FICA - both the employee and employer parts.
President Total Job creation (millions) Private sector job creation (millions)
Reagan (1981 - 1988) 14.8 13.7
Bush I (1989 - 1992) 3.4 2.0
Clinton (1993 - 2000) 23.1 21.2
Bush II (2001 - 2005) 1.7 0.7
Notice that the Clinton raised the top income tax brackets, and contrary to [insert characteristically gratuitous and pointless ad hominem] assertions that this would lead to economic meltdown, produced many more jobs.
Way to cherry-pick!! Of those four Presidents, Clinton was the ONLY ONE to not have one or more recessions during his terms of office, and Clinton's era also featured the end-of-Cold-War "peace dividend". Think that had anything to do with those job-creation numbers ?????
And, why'd you start with Reagan? Why not with Carter? Perhaps because that might tend to undermine your attempted point ?
August 16, 2008, 5:43 pmSolar Lad:
Those programs to help the poor do help the poor to become marginally better off, at the expense of tending to keep them among the poorest bracket of income earners. Taxes, while disproportionally paid directly by the highest earners, tends to disproportionally hamper the efforts of the poor to better themselves.
Which is why the "poor" in Sweden are pretty well-off, but also why there's almost no social mobility in Sweden whatsoever, with the exception of those lucky enough to have great talent in the entertainment or athletic fields - in other words, those whose income leaps, rather than builds incrementally. There's no incremental mobility in Sweden.
August 16, 2008, 5:56 pmJohn Dewey:
Solar lad: "Of those four Presidents, Clinton was the ONLY ONE to not have one or more recessions during his terms of office, and Clinton's era also featured the end-of-Cold-War "peace dividend". Think that had anything to do with those job-creation numbers ?????"
Job creation numbers are as much a product of demographics as any other factor. During the 1990's the smallest population groups of the 20th century - those born in the 1930's - began retiring. They were replaced in the workforce by a group nearly as large as the early Boomers - those born in the mid to late 1970's.
http://www.infoplease.com/ipa/A0005067.html
In addition, immigration added millions of new workers during the 1990's.
August 18, 2008, 5:53 amYoshidad:
Foxmarks says "Each person is in charge of his own income mobility."
Yep, I know rich people who were born on third base, but want to act like they hit a triple. But let's not bullshit each other, shall we? When it comes to economic status, and even personal health, there's an awful lot of luck in this. I'm not saying "don't try," BTW, just "Let's avoid the pride that cometh before a fall."
There's a Polish riddle about this: Q: How do you make a woman into a lady? A: Start with the grandmother.
...
Meanwhile...Stop the presses! I made a mistake! Mesa econoguy is correct, his figures for median wage were adjusted for inflation. His figures were not, however, about the bottom 90% of taxpayers, which is what the previous income immobility argument brought up here: "According to estimates by the economists Thomas Piketty and Emmanuel Saez--confirmed by data from the Congressional Budget Office--between 1973 and 2000 the average real income of the bottom 90 percent of American taxpayers actually fell by 7 percent." Mesa Econoguy cites the bottom 100%, not the bottom 90%. Gosh, someone should learn to read!
Incidentally, Mesa Econoguy, the way to correct someone else, at least in civilized society is *not* "Learn how to read, idiot." (Sheesh! not even an exclamation point!) It's "you are mistaken." Let's disagree without being disagreeable, shall we?
In any case, without the income of that top 10% the median wage would be falling.
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Kyle Bennett believes my argument is "circular" because "To the extent that mobility is diminishing, an hypothesis that no one here has made a serious effort to prove or disprove, history tells us that the single greatest factor likely to cause it is government interference in the economy."
Yoshidad says: I won't deny that government policy is important, but where's your proof that the "single greatest factor" in diminishing economic mobility is government interference. I thought we had 30 years of Reagan-ites de-regulating everything under the sun. When will government interference be lowered enough to detect a rise in income mobility? This contention doesn't pass the sniff test.
And it sure looks to me like the point of the Business Week article was exactly to *prove* diminishing income mobility. And that has been diminishing even during the supposedly effective Reaganite de-regulations. Mr. Bennett: Are you reading something else?
Mr. Bennett's statement also assumes that government only "interferes" with the economy. Is making farm-to-market roads or printing money interfering? How about making a secondary market for mortgages or student loans? Or is that "helping" rather than "interfering." The constant meme on this blog is that government can do no right. Should we have privately minted money? Or what about the Centers for Disease control... shut it down? (IMHO, a better question is this: Did the government miss opportunities to actively help the economy?)
...Don't get me wrong, I don't believe government is perfect, either.
Mr. Bennett continues: "Those programs to help the poor do help the poor to become marginally better off, at the expense of tending to keep them among the poorest bracket of income earners." How do we know this? Silence...
And does the lack of social safety net cost more than it saves? For example, are the junkies doing $10,000 worth of damage by stealing copper from the school's boiler to get $70 for a fix really "kept in their place" by government programs, or the lack thereof? Is that even relevant? (And who's most focused on class envy, the junkies or the rich folks writing in Coyoteblog?)
Bennett says: "Income mobility, at least by anecdotal evidence partly supported by official statistics, is still quite high in this country, especially when compared to most other countries."
This contention is not supported by the facts. For example, this 2006 article says: "Although the United States occupies a middle ground in international comparisons of occupational mobility, its ranking in terms of income mobility is lower. Both the United States and Great Britain have significantly less economic mobility than Canada, Finland, Sweden, Norway, and possibly Germany; and the United States may be a less economically mobile society than Great Britain.45 "
Ouch! Less mobile than the notoriously class-bound Blighty! Double ouch! So "middling," not "quite high" is how to characterize U.S. economic mobility. Notice, BTW, that the Scandinavian socialists beat the U.S. in terms of economic mobility. Sad when you learn you've believed a lie, no?
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Solar lad is unhappy that I call the folks who predicted Clinton's tax raise would be a disaster "voodoo" economists. Pointless? Really? So did we have an economic meltdown during the Clinton years as they predicted? Face it, the prognostication that higher taxes alone would sabotage the economy were false. Period.
As for job creation, and why I left out Carter: Here is the full story about job creation, covering the Republican side too. Although the news for Carter was not all sunny, an excerpt debunks Solar Lad's claim, at least about job creation: "Government statistics do indeed show that the economy lost 1.5 million jobs in Mr. Bush's [the current president's] years in office. Those same measures would also rank Jimmy Carter as one of the most successful presidents."
Solar lad posts again: "there's almost no social mobility in Sweden whatsoever" .. contradicted by the article above which shows economic mobility in Sweden is actually higher than in the U.S.
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Again, my young right-wingers, the points you make are noble in effort, but lacking in substance. I suggest that you consult reality, rather than ideology, and then perhaps our exchange will be mutually profitable.
August 19, 2008, 1:53 pmMesa Econoguy:
Shut up, you fucking moron.
August 20, 2008, 3:48 pm