Income gap still widening

[snoopy369]

Originally posted by Aeson


Why would that matter? Are you saying cost of living peaked too so it's all good if poor people make less?

I'm suggesting that if over the long term, inflation-adjusted income was going up slowly, but at a certain point there was a short-term peak that it fell from somewhat, you could easily suggest that income was dropping when it really was rising in the long term. It's called lying with statistics

[Kidlicious]

Well 10 years isn't really the short run anyway.

[Aeson]

Originally posted by snoopy369
I'm suggesting that if over the long term, inflation-adjusted income was going up slowly, but at a certain point there was a short-term peak that it fell from somewhat, you could easily suggest that income was dropping when it really was rising in the long term. It's called lying with statistics

Sure, you could draw a line from 20000BC till today, and as long as income stayed above ~$0 you could say long term income is rising for all income brackets. It'd be irrelevant.

It ignores the reality that a decade of falling/stagnant income is a bad thing for an economy. Why do you think the housing bubble was created anyways? Why do you think it's deflating now? It's because owners and prospective owners incomes did not keep up with housing prices. (Which were fueled in part by the "buy in now or be priced out" effect of stagnant/falling income.)

Now that debtors aren't able to make their payments, and new buyers aren't able to afford to purchase, housing prices have collapsed. (Creating myriad problems for those on both sides of ARMs and HELOCs which have their own feedback effects increasing the problems.) The government wants to bail out the lenders (or those who invested in their books), which devalues the currency, and we all end up paying for it.

In that timeframe you want to ignore, Gold has been up to ~$1k, from ~$300. Gas is approaching ~$4/gal from ~$1/gal. The USD is down to less than 3 quarters on the dollar. We all pay. The rich and mildly rich can afford to laugh it off (as the Fed bails them out)... the rest, not so much.

[snoopy369]

Originally posted by Kidicious
Well 10 years isn't really the short run anyway.

It is to the statistics we're talking about. Ten years isn't a significant timeframe in terms of socioeconomic movements. It would be significant if we were talking economics directly (as Aeson brings up), but not in terms of socioeconomic trends - there you should talk about several decades at least.

Aeson - I think assuming the bailouts only help the rich is fallacious. In the short term, they certainly help the poor and middle class (by ensuring their banks are stable, etc.) while the rich wouldn't have nearly as high a proportion of their wealth in a bank (as opposed to in securities, etc.) The behavior that necessitated the bailout certainly is atrocious, but that doesn't mean the bailout itself is 'rich-centric' as it is being implied on Apolyton and elsewhere.

[Aeson]

Originally posted by snoopy369
Aeson - I think assuming the bailouts only help the rich is fallacious. In the short term, they certainly help the poor and middle class (by ensuring their banks are stable, etc.) while the rich wouldn't have nearly as high a proportion of their wealth in a bank (as opposed to in securities, etc.) The behavior that necessitated the bailout certainly is atrocious, but that doesn't mean the bailout itself is 'rich-centric' as it is being implied on Apolyton and elsewhere.

There is no free money, sorry. You're transferring the bad stuff to the government's books. That is all.

It's propping up the system which is corrupt and which you admit is atrocious. You're taking the hit, transfering it to the government's books, all to perpetuate the problem.

[Arrian]

I have a problem with bailing out corporations that would, during times of plenty, whine & ***** incessantly about any sort of regulation or taxation - citing the virtues of the free market - but run straight to Uncle Sammy for a handout when their own mistakes come home to roost. **** them.

-Arrian

[Aeson]

I might add that the financial institutions being bailed out (both directly and indirectly) are laying off employees left and right. The "little guy" is getting thoroughly screwed.

[Jaguar]

One of the most powerful causes of this that absolutely never gets brought up:

Most recent immigrants, of which we have a gigantic number, come in at the bottom quintile. They don't stay there. They move on up, and they are replaced by new recent immigrants at the bottom of the ladder.

Then disingenuous people claim that the poor aren't getting any richer. They are. Making that claim, in many respects, is like claiming that 14-year-olds are never getting any older because whenever you look at the population of 14-year-olds, they're all 14 years old.

[Colonâ„¢]

To be fair, it seems social mobility has been decreasing as well.

[Arrian]

Are illegals included in the numbers? I would guess no. So I'd think that particular phenomenon would be muted... legal immigrants aren't all poor. Do you happen to have a link for data on that stuff, Jaguar?

I'm willing to believe the argument - it is logical. But I'd like to see some numbers before I buy into it. It seems possible that it's a case of "true, but not significant."

-Arrian

[snoopy369]

So when the banks go belly up, and NO-ONE is able to borrow for a mortgage without 800+ credit, you're okay with that? Because I'm fairly sure that the people with 800+ credit scores are not generally poor...

[Jaguar]

I know you won't be totally happy with a Heritage Foundation link, but it's the numbers cited, not necessarily the editorializing, that are important.

http://www.heritage.org/research/taxes/bg1418.cfm

A 1992 Treasury Department study showed that between 1979 and 1988, 86 percent of those in the bottom income quintile moved to a higher quintile, and 35 percent in the top income quintile moved to a lower quintile.

The interesting thing about that is the first statistic. That's a huge number of people moving up within a 10-year period, almost the entire lower quintile. Where do their replacements come from? They don't come from the middle U.S. quintiles. They come from Thailand and Costa Rica and El Salvador.

[Kontiki]

Originally posted by Jaguar
Then disingenuous people claim that the poor aren't getting any richer. They are. Making that claim, in many respects, is like claiming that 14-year-olds are never getting any older because whenever you look at the population of 14-year-olds, they're all 14 years old.

That's only true if you're concerned with a fixed group of people. That some people who are in the bottom fifth now may climb out of it later doesn't change the fact that the people who replace them are relatively poorer than the first group was.*

*Note, I'm not trying to debate whether or not they really are relatively poorer, just pointing out the flaw with your reasoning.

[snoopy369]

His point is that the reason that they are relatively poorer is interesting.

[Patroklos]

That 35 percent of the upper quintile falling, I wonder if that is primarily the elderly slowely running through their retirement savings?

Actually, how do they account for such people who don't have any income, but are sitting on a stack of money after cashing out their retirement?