Wall Street Protests

[Undertoad]

Originally Posted by BigV

That's one theory... or you could be reading it wrong. You are overthinking it.

That is partly the case as "cumulative" is not the fact -- which is why I puzzled over it.

The part that remains the case is that the rich get richer during good times, and the graph starts in the bad times and ends in the good times. We patiently wait for a graph update, as the next few years will show a hefty decrease for the 1%.

(Also, these numbers are for households instead of per-capita, which is misleading, as the household income may be a household of one, or an extended family.)

The numbers seem to have not been developed, except for the IRS figures for the top 5%. And here's where figures lie and liars figure: going from upturn to downturn, the numbers for the top 5% are about the same in 2000 as they are in 2009.

There's another aspect to this: wealth is not like a big pie, where if the people at the top eat a bigger piece, that means people like you and me are left with a smaller piece.

The graph shows us how this is not the case. Where the top 1% lines are moving up, all the other lines are moving up too! WTF?

That means if you want to improve your own muddy situation, you should root for the 1%. If the 1% do well, in no time at all, it'll feel like it's 2007 again.

[Spexxvet]

Originally Posted by Undertoad

There's another aspect to this: wealth is not like a big pie, where if the people at the top eat a bigger piece, that means people like you and me are left with a smaller piece.

There are times when the pie gets bigger, but the 1% keeps the entire increase.


UT, Are you just playing devil's advocate? Regardless of the clarity of the graph, do you believe that the middle class is in the same position, compared to the top 1%, as it was in 1979 or 1955, or 1996?

[Undertoad]

Originally Posted by Undertoad

(Also, these numbers are for households instead of per-capita, which is misleading, as the household income may be a household of one, or an extended family.)

See the "earners per household" row.

[Undertoad]

(phew)

But does the graph tell us anything interesting?

Yeah, it does so in a back-handed sort of way. Just as the home run graph would rise faster during the steroid era, we see that this graph actually has downturns in the top 1%. From 1986-1988 it saw a drop-off which is actually quite stunning. Since this graph is measuring cumulative numbers, it's telling us that the top 1% made very little during those years, a lot of them probably took a loss; and again from 2000-2003.

The gain from 2003-2007 is rather large, but if we continue this graph from 2007-2011, I assure you the drop-off will be similarly massive.

The economics reason for this is simple:

During good times, everybody gets richer, but the rich get richer at a much faster rate. During bad times, everybody gets poorer, but the rich get poorer at a much faster rate.

So when you want to prove income inequality, it's easy: just start your graph at a point where good times BEGIN, and end your graph at a point where good times END.

[Undertoad]

Originally Posted by Undertoad

The gain from 2003-2007 is rather large, but if we continue this graph from 2007-2011, I assure you the drop-off will be similarly massive.

Or even more massive. Here are some early figures up to 2009. This chart is not measuring the same thing as the original, but the curve will be the same. It shows you why, if you want to tell a certain part of the story, you stop at 2007.

Over time, the Top 1% has claimed a bigger share of the income pie. In 2007, they earned 22.8% of the nation's income, more than double the amount in 1986, according to IRS data. The recession has since brought that slice down to just under 17% for 2009.

The top 1%'s slice of the pie fell dramatically... by a full quarter in only two years! But note that this massive dropoff in their share did not result in more money for the less fortunate.

source

[Stormieweather]

The rest of that article:

that slice down to just under 17% for 2009.

While those at the top have seen their incomes soar over time, middle-class incomes have stagnated.

"The higher up the income distribution you go, the more your income rose and the larger the share of total income gains went to your group," said Roberton Williams, a senior fellow at the nonpartisan Tax Policy Center.

But as corporate profits and productivity have increased, workers aren't reaping the benefits, said Edward Wolff, a New York University economics professor who specializes in income inequality. That's helping spark the movement, which has spread across the country.

"There is a lot of anger and it's for a very good reason," Wolff said. "If all of the income gain goes to the top, there's not much left to go to the rest of the people."

In 2010, there were 46.2 million American's living in poverty. That is the largest number since the census began keeping track, 56 years ago. 1 in 5 children is now living below the poverty level (22%). How is that acceptable on any level?

[Undertoad]

Originally Posted by Undertoad

The gain from 2003-2007 is rather large, but if we continue this graph from 2007-2011, I assure you the drop-off will be similarly massive.

The economics reason for this is simple:

During good times, everybody gets richer, but the rich get richer at a much faster rate. During bad times, everybody gets poorer, but the rich get poorer at a much faster rate.

And so they did. The numbers are in and from 2007-2009, 1%'s take of everything fell from 22.8% to 16.9%.



source

If we were to graph this on that CBO graph I criticized, the fall would be even steeper. And if we were to examine the top 0.5% it would even be steeper again:

The most dramatic collapse has been in high incomes, as the most recent IRS data shows.

For example, since 2007 the number of millionaires has dropped 40 percent, while income reported by millionaires has dropped in half.

[Lamplighter]

UT, sorry but I'm not getting your point... at least from it being posted in this thread.

On one hand, we understand that everyone suffered in the downturn since 2007.
Is your point that the 1% suffered more than others ?

[Spexxvet]

Originally Posted by Lamplighter

UT, sorry but I'm not getting your point... at least from it being posted in this thread.

On one hand, we understand that everyone suffered in the downturn since 2007.
Is your point that the 1% suffered more than others ?

We should feel sorry for the unfortunate people who have lost 40% or 50% of their wealth and still have 1,000% of our wealth. Poor them. Poor, pitiful them.

[Undertoad]

Originally Posted by Lamplighter

Is your point that the 1% suffered more than others ?

This is a continuation of the discussion in this thread from 3.5 months ago. My point is evident, to the critical thinkers in our presence, who apparently haven't posted yet today.

[Lamplighter]

Originally Posted by Undertoad

This is a continuation of the discussion in this thread from 3.5 months ago. My point is evident, to the critical thinkers in our presence. If there are any.

Oh come on... that's a cheap shot.

What are you trying to say ?

[Spexxvet]

Originally Posted by Undertoad

My point is evident, to the critical thinkers in our presence, who apparently haven't posted yet today.

Because if someone disagrees with you, they're not just incorrect, not just wrong, not even just stupid, but actually broken.

[Undertoad]

JIM Rice.

[ZenGum]

There's another aspect to this: wealth is not like a big pie, where if the people at the top eat a bigger piece, that means people like you and me are left with a smaller piece.

Sometimes true, sometimes not. There's the rub.

Some rich folks did get rich by making the pie bigger, and getting a nice big slice for themselves, which is fine so long as those with small slices don't actually go backwards, and it is good if those with small slices find their slices growing, however slightly. (In philosophy-speak: an inequality is acceptable if those who are worst off under the inequality would be even worse of if the inequality were to be removed.)

However, quite a few rich folks get rich not by enlarging the pie, but by getting a bigger % of the pie for themselves. In fact, some even make the pie smaller in doing so (remember the plot of Wall Street, even though it is fiction?) This is what pisses people off.

I've seen the difference first hand. I used to work for a multinational pizza chain.
They introduced a new super-big pizza, spent money on new equipment and advertising. Sales went up, the company made a little more money, and the staff got maybe a few more hours per week. The pie had got bigger. Good capitalism.

Later, they pushed all the drivers from hourly rates to contract per delivery. We did the same work for less money. The pie was no bigger, but the slices were cut differently. We, the workers, got screwed. Bad capitalism.

It happens both ways, and to pretend it doesn't is simply incorrect, whichever side you support.

[Undertoad]

Different kind of wealth sir; the wealth of a nation is measured in how it maximizes its workforce's output, and additional wealth is generated through innovation (tw is right all along about this), in which it creates more or new things while consuming fewer materials.

Whereas in 1979, listening to new music required me to drive to a merchant, purchase a layer of vinyl made out of oil, produced by large pressing plants and distributed by truck, right now a friend suggested a new band and listening to them required me to make a search and two clicks.

Whereas in 1979, the lung cancer survival* rate was ~15%, by 2007 it's ~30%. This is another measure of wealth.

Generating new wealth in the pizza game would be found in getting food to the people using less raw materials. Shifting the price around between dough and labor doesn't improve a nation's wealth. But if one created a 20% more efficient oven with the same cost, that would create wealth out of nothing.




*Cancer survival rate is a complicated thing to measure and so any single number given for it is probably an simplification, but you get my drift.