The rich are getting richer much, much faster.

Dinner · May 20, 2012, 13:45

http://www.nytimes.com/2012/03/26/op...ef=todayspaper

93% of all the recovery in income in 2010 went to the top 1%. 65% went to the top .1%.

In previous recessions this occurred, but not nearly at this rate.

In the Clinton era expansion, 45 percent of the total income gains went to the top 1 percent; in the Bush recovery, the figure was 65 percent; now it is 93 percent.

Why? Tax codes that favor the rich, who earn the majority of their income from capital gains which is taxed at a maximum of 15% is one of the major factors.

The other major factor includes the continued impact on globalization and automation on blue collar middle class workers, who are failing into what was traditionally the lower class at ever increasing rates.

The average increase of pay in 2010 for the bottom 99%? $80, after adjusting for inflation.

There is a recovery going on for the country as a whole. But almost everyone in the country wouldn't know it from their own financial situation.

gribbler · May 20, 2012, 13:49

Yeah, of course almost all of the income gains from the recovery went to the top 1%. Their income is highly volatile and they took a large part of the income losses from the recession. The wealthy can tolerate a lot more risk than the not-so-wealthy. That doesn't have much to do with the fact that most of the American population is not earning much more now than it did in the 1970's.

Dinner · May 20, 2012, 13:50

Before someone squeals the usual knee jerk "class warfare" (well, that is the usual right wing defense to anyone pointing out problems with their policies) I'd like to point out as the gini index goes up societies become less stable, economic growth becomes more erratic as the economic base narrows, and almost always once a society is mostly the very rich & the very poor than political power becomes concentrated in the hands of the few. These are all major problems which are getting worse not better.

Kuciwalker · May 20, 2012, 14:52

Originally Posted by gribbler

Yeah, of course almost all of the income gains from the recovery went to the top 1%. Their income is highly volatile and they took a large part of the income losses from the recession. The wealthy can tolerate a lot more risk than the not-so-wealthy. That doesn't have much to do with the fact that most of the American population is not earning much more now than it did in the 1970's.

This is false.

Kuciwalker · May 20, 2012, 14:53

OP uses an incoherent definition of income.

gribbler · May 20, 2012, 15:22

There's nothing "incoherent" about defining income as the amount someone takes in.

Ben Kenobi · May 20, 2012, 16:11

So food stamps should count as income? Bizarre.

Good! More rich people means more jobs.

DaShi · May 20, 2012, 16:17

The rich are above reproach.

gribbler · May 20, 2012, 16:20

Originally Posted by Ben Kenobi

So food stamps should count as income? Bizarre.

Good! More rich people means more jobs.

If we're measuring income after taxes and transfers, yes.

Ben Kenobi · May 20, 2012, 17:02

Taxing people for foodstamps.

Dinner · May 20, 2012, 17:15

Originally Posted by Ben Kenobi

So food stamps should count as income? Bizarre.

Good! More rich people means more jobs.

Wrong as always. Capital is part of the equation but an equal part is demand created by consumers. When you impoverish the middle class you decrease demand greatly which decreases job creation. It's like you don't know what a feed back loop or cycle is.

No one will invest without demand, capitalists only hire as a measure of last resort when demand REQUIRES them to do so. If you want the cycle to work you have to have both investors and demand other wise you fail.

Dinner · May 20, 2012, 17:21

Originally Posted by Ben Kenobi

Taxing people for foodstamps.

Food stamps actually create demand because poor people actually spend the money at stores, sure, you can't have your economy relay to much on that but as a direct stimulus to increase demand it is good. Tax cuts for rich people? Not so much, they already have everything they need so they often save the money or pay down debt. Long term that's good but in the short to medium term it does nothing to increase demand which is what stimulus is supposed to do.

gribbler · May 20, 2012, 17:23

Originally Posted by Ben Kenobi

Taxing people for foodstamps.

If you wanted to tax people for their food stamps, you could simply decrease the amount of food stamps they get and achieve the same result. I don't know why, when presented with two different policies with identical effects, you would choose the more complicated one.

Dinner · May 20, 2012, 17:25

It's ben. He always chooses the dumb option.

Kuciwalker · May 20, 2012, 22:17

Originally Posted by gribbler

There's nothing "incoherent" about defining income as the amount someone takes in.

It measures economically equivalent forms of capital income different depending on details of accounting. So yes, it is incoherent.

Jon Miller · May 21, 2012, 01:43

Prove that statement.

JM

Kuciwalker · May 21, 2012, 01:44

Capital gains vs. investment income is the trivial one.

Another one is pensions. Pension accruals are not counted as income, but if a company gives me money and I buy deferred annuities with it, that is.

Jon Miller · May 21, 2012, 01:47

Originally Posted by Kuciwalker

Capital gains vs. investment income is the trivial one.

That is the one I was thinking of.

I don't think that they are economically equivalent.

I couldn't make a model that worked, and ignore one.

Just because they are degenerate in one equation does not mean they are equivalent.

JM

MRT144 · May 21, 2012, 02:00

Originally Posted by Ben Kenobi

So food stamps should count as income? Bizarre.

Good! More rich people means more jobs.

You're a ****ing idiot.

Jon Miller · May 21, 2012, 02:07

Originally Posted by Kuciwalker

Another one is pensions. Pension accruals are not counted as income, but if a company gives me money and I buy deferred annuities with it, that is.

Uh, why isn't pension accruals something that a person is taking in?

We are talking about having a consistent definition.

JM

Kuciwalker · May 21, 2012, 02:46

.

Kuciwalker · May 21, 2012, 02:46

Originally Posted by Jon Miller

Uh, why isn't pension accruals something that a person is taking in?

? What are you asking ?

Jon Miller · May 21, 2012, 03:13

The question was:

"how is defining income as 'what a person takes in' incoherent?"

BTW, I can see how due to accounting/etc, that it is probably best to tax on consumption and wealth and leave income alone.

JM

MrFun · May 21, 2012, 03:29

Originally Posted by DaShi

The rich are above reproach.

That's generally the consensus among many on Apolyton. A lot of members here are tools for the one percent.

Jon Miller · May 21, 2012, 04:48

I am playing with a hypothesis in my head:

Richness is gained either by taking advantage of poor governance (generally of your own country, but sometimes others), or by a new technology, or some other new resource to exploit.

The technology of the 80s/etc was computers, the technology of now is financial and informational (note that just because a new technology is available does not mean that it improves the rest of society, I am not convinced that that the new financial technologies have improved capital allocation for those who are not financiers).

If nations want to become wealthy, they need to make sure they have the necessary capital investments to take advantage of the new technology (it is probably too late to lead in finance or information). For people I think you can probably jump on, but you might need to move.

Exploiting your own nations lack of governance is of course a problem, taking advantage of another nations lack of governance is not necessarily a problem.

For new natural resources you have to get lucky (and there are less of those that are *new*).

One conclusion of this is that becoming wealthy does not come about by delayed consumption.

JM

Kuciwalker · May 21, 2012, 09:23

Originally Posted by Jon Miller

The question was:

"how is defining income as 'what a person takes in' incoherent?"

Because there are lots of things that I implicitly "take in" that aren't included!

Jon Miller · May 21, 2012, 09:25

Originally Posted by Kuciwalker

Because there are lots of things that I implicitly "take in" that aren't included!

They should be, if you define income as 'what a person takes in'.

I actually think it is the most defensible definition.

JM

Kuciwalker · May 21, 2012, 09:30

In that case no one should care about income, unless by "what a person takes in" you're including all of the things I've described. In that case your definition is fine but it's not what's being measured by your statistic.

Jon Miller · May 21, 2012, 09:33

It wasn't my statistic.

I do think that it should include everything that is taken in, including transfers.

JM

Ogie Oglethorpe · May 21, 2012, 10:17

Originally Posted by gribbler

Yeah, of course almost all of the income gains from the recovery went to the top 1%. Their income is highly volatile and they took a large part of the income losses from the recession. The wealthy can tolerate a lot more risk than the not-so-wealthy. That doesn't have much to do with the fact that most of the American population is not earning much more now than it did in the 1970's.

This.