Sam Stone believes Trump's tweets

[JohnT]

What is the individual cost of this madness?

Sam mentions some gadgets which somehow resulted because of trickle-down economics (TDE), but he hasn’t really explained that TDE was necessary for any of these things, especially given Western civilization’s rather impressive track record on creating technical shit, especially from 1455-onward. In fact, we can safely say that a non TDE world gets us to 1980s levels of civilization, which isn’t bad. Hell, we had dial-up back then.

But I digress.

What has TDE cost us, the individual? See, this is the one thing you don’t have to worry about, Sam, because you don’t live in a country dumb enough to enact these ideas across the entire societal spectrum. Tragically, however, I do.

Let’s look at this graphic again:

I posted it upthread, but want to reintroduce it to this discussion. This graph shows the disconnect between productivity growth and wage growth of production workers which started in 1975 and accelerated in 1981.

And before I get accused of posting Lefty cites, here is the Heritage Foundation with a similar graph showing the same relationship:

(We’ll go into “Total Compensation” and what an anti-worker crock that concept is later.)

OK, so there is a disconnect between productivity growth and wage growth, one which didn’t exist before Nixon and was greatly boosted by Reagan. Much of this is due to the financialization of America, the process beginning in the mid 1970s of turning ownership into streams of revenue. Using junk bonds is an example of the financialization of America. The inability to buy a DVD, requiring us to stream movies we once could own is another. Student loans, an especially pernicious form of the concept. Derivatives. RMBS’s. Microsoft going from Office CD’s to Office 365. The list goes on.

But why does this matter?

The Rand Corporation looked at the above gap and decided to commission a study, released in August 2020, which did nothing but measure the economic impact of this change. on the various class levels here in America. They did not spend time exploring why this had happened, they just wanted to know the financial impact.

This 69 page report (found below) breaks down the impact by income percentile, race, gender, state, and more. There are well over 100 different tables, and I chose the most comprehensive for this post:

Here’s how to read this chart, looking at line 2 (MEDIAN):

In 1975, the median individual (he/him) earned the equivalent of $42,000 in 2018 dollars. In 1979, the same. In 1989 his income increased $1k to $43k (but I thought the 80s were unprecedented prosperity? But I digress again…). By 2000, $47k, a dip during the Bush years, and in 2018, this person made $50,000…. $8,000 more than they were making in 1975.

Had his income increased the same as it did ala 1945-1974 (“Counterfactual”), his income would be $92,000.

Therefore, the median individual income grew only 16.0% as it would have under 1945-1974 growth rates.

Now let’s look at the 99% (last line):

In 1975, the average 1%er (TOP 1% MEAN) took home $289k equivalent. $292k in 1979, $467k by the first year of the Bush1 admin, more than doubling in the 1990s to $1.1M/yr, ending up at $1.384m in 2018.

Had their income increased the same as 1945-1974, they would be earning $630,000

Therefore, the average 1%er grew their income at a rate 3.211x more than they would have had we kept to 1945-1974 rates.

Time Magazine has an excellent write-up on the financial catastrophe your economic ideas have had on America. Some quotes:

the RAND report brings the inequality price tag directly home by denominating it in dollars—not just the aggregate $50 trillion figure, but in granular demographic detail. For example, are you a typical Black man earning $35,000 a year? You are being paid at least $26,000 a year less than you would have had income distributions held constant. Are you a college-educated, prime-aged, full-time worker earning $72,000? Depending on the inflation index used (PCE or CPI, respectively), rising inequality is costing you between $48,000 and $63,000 a year. But whatever your race, gender, educational attainment, urbanicity, or income, the data show, if you earn below the 90th percentile, the relentlessly upward redistribution of income since 1975 is coming out of your pocket.

Price and Edwards look at real taxable income from 1975 to 2018. They then compare actual income distributions in 2018 to a counterfactual that assumes incomes had continued to keep pace with growth in per capita Gross Domestic Product (GDP)—a 118% increase over the 1975 income numbers. Whether measuring inflation using the more conservative Personal Consumption Expenditures Price Index (PCE) or the more commonly cited Consumer Price Index for all Urban Consumers (CPI-U-RS), the results are striking.

On average, extreme inequality is costing the median income full-time worker about $42,000 a year. Adjusted for inflation using the CPI, the numbers are even worse: half of all full-time workers (those at or below the median income of $50,000 a year) now earn less than half what they would have had incomes across the distribution continued to keep pace with economic growth. And that’s per worker, not per household. At both the 25th and 50th percentiles, households comprised of a married couple with one full-time worker earned thousands of dollars less in 2018 dollars than a comparable household in 1975—and $50,000 and $66,000 less respectively than if inequality had held constant—a predicament compounded by the rising costs of maintaining a dignified middle-class life. According to Oren Cass, executive director of the conservative think tank American Compass, the median male worker needed 30 weeks of income in 1985 to pay for housing, healthcare, transportation, and education for his family. By 2018, that “Cost of Thriving Index” had increased to 53 weeks (more weeks than in an actual year). But the counterfactual reveals an even starker picture: In 2018, the combined income of married households with two full-time workers was barely more than what the income of a single-earner household would have earned had inequality held constant.

It’s now 2021 and it’s worse. Federal Reserve policy since Jimmy Carter has done nothing but exaggerate this problem, one which wasn’t slowed by the Democratic administrations of Clinton or Obama (so don’t give them a pass on this either) who themselves accepted the ideological framework of modern conservative economics, all driven by that laughably simple Laffer curve.

Sam, this “trickle down” you love has represented a $50,000,000,000, $50 trillion, transfer of wealth from the middle class and lower to the top 10% since 1975.

From me. From all the other Americans on this Board. But not from you, let us never, ever forget this fact, Sam, as you pitch for bad ideas which you never have to suffer under.

To be quite frank, I am perfectly willing to give up Itunes and ABS brakes for $40k more a year. In fact, I’m pretty damned confident that these things would exist even if it weren’t for that fucker, Reagan.

The Top 1% of Americans Have Taken $50 Trillion From the Bottom 90%—And...

https://www.rand.org/pubs/working_papers/WRA516-1.html