Reminds me of Ireland exporting food to England during the Great Famine. The perversity of market economies when it involves trade between greatly unequal nations.
Showing posts tagged inequality
That red line is income growth for the bottom 90%. Notice how it rather dramatically flattens out in the 1970s and those lines for various subsets of the top 1% start reaching for the top of the chart. I’m sure that’s just the free market in action. Nothing that can be done about it.
Anyways, the chart’s from Thomas Piketty and Emmanuel Saez’s newest data on inequality. Yep, it’s still increasing. And no, my solution (to be honest, I wasn’t the first) of expropriating the capitalist class and putting the means of production in the hands of the proletariat doesn’t seem to be getting any closer to reality. I think the big thing our politicians are concerned with is convincing us to slash retirement benefits so that we can keep taxes on the rich low and not cut defense spending. Full communism is obviously the better idea.
Hey you guys! Slate’s Farhad Manjoo says MoJo should have won a Pulitzer for our charts. If they gave Pulitzers for that kind of thing. #humblebrag
MoJo’s humblebrag aside, look at those charts. Look at who’s getting richer exponentially and who’s slowly getting poorer. Surprised? I didn’t think so.
(They are pretty great charts.)
-Jess
It’s true. MoJo does have the best charts.
This graph shows corporate profits and the payouts to stockholders for nonfinancial firms. We all know that the capitalist class has managed to divert an increasing portion of our nation’s wealth into their own pockets over the last thirty years. Our corporate controlled media and politicians don’t want to dig into how it’s happened. This starts to point us in that direction:
In the pre-neoliberal era, up until 1980 or so, nonfinancial businesses paid out about 40 percent of their profits to shareholders. But in most of the years since 1980, they’ve paid out more than all of them. In 2006, for example, nonfinancial corporations had after-tax earnings of $800 billion, and paid out $365 billion in dividends and $565 in net stock repurchases. In 2007, earnings were $750 billion, dividends were $480 billion, and net stock repurchases were $790 billion. (Yes, net stock repurchases exceeded after-tax profits.) In 2008 it was $600, $470, and $340 billion. And so on.
Putting this up because I want to discuss this stuff further, because it’s really quite relevant.
Lee says Wall Street purposely aimed to strip minorities of wealth
The Hill reports tough words from Oakland Rep. Barbara Lee Wednesday in Washington.
Lee pointed her finger deep into the chests of corporations and banks she argues unduly targeted blacks and minorities with fraudulent financial schemes.
She said these statistics showed that people on Wall Street “focused their efforts on stripping communities of color of the little wealth that they have managed to accumulate over the last few decades.”
“The facts speak for themselves: Wall Street targeted minority homeowners and minority communities, and we must respond accordingly,” she said.
I’m going to call this one “Least Surprising Headline of the Day.”
…
Romney’s money: how long would it take him to make what you earn in one year?
Here’s a fun game from Slate — enter YOUR annual income to see how long it would take Mitt to sit back and wait for that amount of money to appear in his many bank accounts around the world…
I put my income as 100,000. Guess what this said:
“In 2010, Mitt Romney made $100000 in 1 days 16 hours 26 minutes and 26 seconds.
It would take you 216 years 7 months 10 days 23 hours 44 minutes and 3 seconds to make what Mitt made in 2010.”
“In 2010, Mitt Romney made $XXXXX in 9 hours 1 minutes and 56 seconds.
It would take you 969 years 10 months 1 days 21 hours 41 minutes and 32 seconds to make what Mitt made in 2010.”
The ‘Great Gatsby’ Curve
Alan Krueger, the chairman of the Council of Economic Advisers — who is not only a colleague of mine at Princeton, but gets a lot of my mail and vice versa — gave a very informative speech on inequality last week that should have received more press than it did.
Above is what he dubs the Great Gatsby Curve. On the horizontal axis is the Gini coefficient, a measure of inequality. On the vertical axis is the intergenerational elasticity of income — how much a 1 percent rise in your father’s income affects your expected income; the higher this number, the lower is social mobility.
As he shows, America is both especially unequal and has especially low mobility. But he also argues that because we are even more unequal now than we were a generation ago, we should expect even less social mobility going forward.
Very illuminating — and disturbing.
I’ve been meaning to blog this. It’s actually a pretty interesting finding. Reality-based economists have known for a while that the idea that America is actually not actually doing well at social mobility. I blogged a while ago about the fact that social mobility has been decreasing in the US. But I think showing that inequality and social mobility are negatively correlated to this extent is pretty new. Of course, if you’re all for creating a permanent underclass, we’re going about that quite well.
Mr. Block doesn’t know his true interests as a worker.
The more things change, the more they stay the same. Here’s Kevin D. Williamson in The New Criterion explaining how a family with two minimum wage earners can have over $1.5 million saved for retirement:
The welfare state isn’t a very good buy. The average Social Security benefit runs just over $1,100 a month—peanuts, hardly enough to keep you in cut-rate butter once your median rent of more than $800 has been paid. For that, you’re taxed 12 percent of your take-home pay. Compare that to this: A married couple, each earning the minimum wage, investing only 10 percent of their earnings at a modest 7 percent return, retires with an annual income of more than $100,000 a year—even if they never touch the $1.5 million principle they’ll leave to their children. President George W. Bush was mocked for calling his proposal to cultivate such minimum-wage millionaires the “Ownership Society,” but it was the most important initiative of his presidency.
Because that’s something that’s actually ever happened, I’m sure. (hat tip: Naked Capitalism)
“
“Who gives a crap about some imbecile? Are you kidding me?” Bernard Marcus, co-founder, Home Depot
“Acting like everyone who’s been successful is bad and because you’re rich you’re bad, I don’t understand it.” Jamie Dimon, CEO, JP Morgan Chase
“Instead of an attack on the 1 percent, let’s call it an attack on the very productive.” John A. Allison IV, BB&T
“If I hear a politician use the term ‘paying your fair share’ one more time, I’m going to vomit.” Tom Golisano, founder, Paychex Inc.
My taxes are “more than a medieval lord would have taken from a serf.” Peter Schiff, CEO, Euro Pacific Capital
“I am a fat cat, I’m not ashamed.” Ken Langone, co-founder, Home Depot
“You’ll get more out of me if you treat me with respect.” Leon Cooperman, chair, Omega Advisors
Corey Robin excerpts some representative quotes from rich fucking bankers and corporate executives who somehow think the rest of us only have jobs because they’re there to skim off the surplus value that we create.
“
When President Ford went on national television to explain to an angry, skeptical citizenry why the most powerful political actor would be fully immunized for the felonies he got caught committing, Ford expressly rejected the rule of law. He paid lip service to its core principle—the “law is no respecter of persons”—but then tacked on a newly concocted amendment designed to gut that principle: “but the law is a respecter of reality.”
In other words, if—in the judgment of political leaders—it’s sufficiently disruptive, divisive, or distracting to hold powerful political officials accountable under the law on equal terms with ordinary Americans, then they should be exempt and the rule of law suspended, all in the name of political harmony, of “moving on.” But of course, it will always be divisive and distracting, by definition, to prosecute the most powerful political leaders, so Ford’s rationale, predictably, created a template for elite immunity.
Glenn Greenwald, discussing his new book, Liberty and Justice for Some with Scott Horton of Harper’s Magazine. Anytime I read something by Glenn Greenwald, I get angry at the world. I don’t know how he spends so much time learning and writing about these things. I couldn’t do it.
“
But a scientific revolution that has taken place in the last decade or so illuminates a different way to address the dysfunctions associated with childhood hardship. This science suggests that many of these problems have roots earlier than is commonly understood—especially during the first two years of life. Researchers, including those of the Bucharest project, have shown how adversity during this period affects the brain, down to the level of DNA—establishing for the first time a causal connection between trouble in very early childhood and later in life. And they have also shown a way to prevent some of these problems—if action is taken during those crucial first two years.
The first two years, however, happen to be the period of a child’s life in which we invest the least. According to research by the Urban Institute and the Brookings Institution, children get about half as many taxpayer resources, per person, as do the elderly. And among children, the youngest get the least. The annual federal investment in elementary school kids approaches $11,000 per child. For infants and toddlers up to age two, it is just over $4,000. When it comes to early childhood, public policy is lagging far behind science—with disastrous consequences.
Jonathan Cohn in an article on new studies of early childhood development in The New Republic. Just one of the main ways our society keeps the same hierarchy in place from one generation to the next. The damage done to neglected children in the first two years of their lives is pretty much permanent. All the way down to the level of “telomeres, which are protective caps that sit on the ends of chromosomes” which are shorter in the cells of children who are neglected or abused early in life.
New data from the Boston Federal Reserve Bank show that social mobility is slowly decreasing. The rich are more likely to stay rich and the poor are more likely to stay poor than 40 years ago. Jared Bernstein makes the obvious connection to the rise in income inequality over the same time:
There are various links to this chain—and this is just a hypothesis at this point (but I’ll bet I’m right). The relationship between income concentration and political power is one important link. The austerity measures we are now contemplating, the regressive changes to the tax code, the sharp cuts in discretionary spending (a part of the budget that pays for, among other things, various investments in human capital targeted at less advantaged populations)—the general and pervasive view that we a) can’t afford the investments and social insurance we need, and b) can’t raise taxes to pay for them—is not an objective fact based on analysis. It’s a political call based on power.
Or, as Kevin Drum explains the dynamic:
- Income inequality is increasing: the rich are much, much richer today than they used to be.
- To deal with this, tax rates on the rich have gone down.
- Income mobility is decreasing. If you start out poor or middle class, you’re more likely to stay there than in the past.
- To deal with this, government assistance to the poor has gone down.
Or, to put it as simply as possible: “The government is controlled by, and acts solely in the interest of, the rich.”
This chart shows the difference between what people make today, and what they would be making if the trends from post-WWII to 1979 had continued after then. Basically, the money that the bottom 80% would be making under those conditions would be a total of $743 billion more than now, meaning an average family in the middle quintile (40%–60%) would be making $10,100 more per year. Meanwhile, the top 1% has seen a $673 billion explosion in its annual income. That is a massive transfer of wealth from most of us to the tiny few on the top. And they accuse us of “class warfare.”
A bunch more charts from Mother Jones if you click on that one. All from back in March, when everyone was ignoring inequality and screaming about the deficit. A little bit of direct action helped change that conversation finally.
Just another chart from Kevin Drum at Mother Jones that may help to explain why there’s a ragtag band of hippies and anarchists, and whoever else is with them camping in a park near you. Also, in case you were wondering which side you ought to be on.
