Regarding how poor people do during a recession, food insecurity spiked last time. But has been declining. Slowly. It’s only recently back near the stubborn baseline. See USDA ERS.
Going back to the OP, it surprises me Trump’s China policy did not have a more immediate effect on the market. Many companies - Apple, Walmart, etc. have extensive business in China which would be expensive to relocate. One assumes that economists felt Trump was speaking loudly and carrying a small twig. Since both the US and China are interdependent and something needs be done about protecting intellectual property. In my view, the market failed to fully account for volatility from trade policy, increasing nationalism (including the Brexit disaster) and related isolation, protectionism and belligerence. The president impact on the economy is often exaggerated. Trump has a larger effect than most, though, since his comments are public, unfiltered and various shades of hyperbole.
Coronavirus is pretty concerning, but this has been amplified by the media. It will have an economic hit, which will be temporary and harsh. Some of the correction is due to overvalue and much is due to fear. It would make sense to “fear the unknown” of Brexit or hardened attitudes to trade policy or Chinese tariffs. Coronavirus is an easier excuse. The whole economy is unknowns- a virus is no different apart from hysterical value.
Trump’s fault? He didn’t cause the virus. He can be blamed for the wisdom of putting Pence in charge. This is not a comment on Pence, but the markets perception on how effective his interventions may be. The market didn’t react earlier to China because of jobs numbers and wilful blindness. Now it is. The economy is not the president though. He didn’t deserve full credit for its rise, and doesn’t for the correction. I hope the Dems pick a candidate that can challenge him.
It does if that person’s raise is at the expense of yours, or if the person got a raise due to him laying off a bunch of the workforce to improve short term profitability.
Or if the raise allows him to buy in your neighborhood and price you out of the market.
You can look at value as just being total numbers or you can look at it on the margin but you have to pick one.
I agree that for most an extended period of unemployment because of a recession is more impactful than a billionaire losing a 10% of their wealth. However if you concede that then you have to also believe that a long period of steady employment is worth more than a billionaire adding a couple hundred million in paper gains. Thus the current economy where the 2010s were the only decade since records were kept without a recession is the best economy for the poor maybe ever and that inequality is no big deal.
You can say that only the numbers matter in which case prosperity is better for the rich than the poor and recessions are harder on the rich than the poor. Or you can say that what matters is marginal utility and so prosperity is better for the poor than the rich and recessions are harder on the poor than the rich.
But what I object to is to say that the numbers matter during good times and marginal utility means more than the bad times, because that is picking metrics to suit a predefined narrative.
For those determined to bad mouth the economy, we played you a jig and you wouldn’t dance, we played you a dirge and you wouldn’t cry.
This is not true. If you look at GINI coefficient and prevalence of mental health disorders there is no correlation.
Not only that but countries withmore inequality have longer life expectancies than countries with lower inequality. Studies that show otherwise are because of selection bias.
Speaking of bias, one can notice that the critic there is a writer countering a book… books seem to be the way to go when there is no hurry to deal with peer review.
Incidentally, I could just have stoped to check when a lot of the glowing reviews for that critic are coming from very biased right wing sources. But, the issue here is that the author cited by Left Hand of Dorkness who you are replying to, was Joe Herbert M.B, Ph.D. Not the ones that made that likely flawed “The Spirit Level”. Nowhere in the Joe Herbert article does he cites The Spirit Level or their authors.
I looked then at the background and supporters of Snowdon and I had to agree with this review of one of the books:
But the billionaire already has material security. Steady employment only gets a person to some degree of parity in terms of fundamental security, and in a country where people go bankrupt just because they get sick, there’s a limit to that comparison; once employment is lost, a person’s life can quickly fall apart.
Technically true, but not really valid in the context of this discussion. Yes, people who hold onto investments may lose wealth and in the near term, the data graphics might show a slighter degree of relative parity, but that’s owing more to the losses sustained by the wealthy.
What that kind of analysis fails to acknowledge is the aftermath, the ability to withstand the effects of a recession and recover from it. When some investment guru loses millions in his portfolio, he can wait out the downturn - he can go on living. Maybe he sheds some of his properties for the sake of liquidity. OTOH< people who are just barely getting by get sucker-punched by an economic downturn, and they have no such ability to recover other than standing in an unemployment line, or maybe filing for bankruptcy.
Moreover, when the economy recovers, they are less likely to go back to where they were pre-recession, which is different from those with excessive wealth. If you look at this graph on income inequality, for instance, you’ll see a slight dip during the recessionary period, but look at what happened post-recession. Income inequality is now as high as ever.
Yeah and when you open your graph one immediately notices that two of the countries with the lowest income inequality have the highest life expectancies.
Of course correlation isn’t causation one way or the other - your post is merely throwing spaghetti at the wall.
Right, let’s dance to the tune of income inequality the highest it’s been since the 1920s. I think you remember the song that played soon thereafter. Herbert Hoover was the conductor.
Thanks for that, I was willing to even toss a bone to **puddleglum **by assuming the debate that took place then, but that reply from the authors of the research and book is a very good one; as serious researchers always say, more research was needed, and that took place in the research referred in the latest article linked by **Left Hand of Dorkness **.
What the references in the article show is that it is not only thanks to Meta-analisis that one can say that the research from Richard Wilkinson and Kate Pickett, authors of The Spirit Level, has support; and also robust evidence that supports it coming from others.
As your cite says income inequality goes down during recessions. But as you say it is true that recessions hurt the poor more than the rich because they have less to resources to fall back on.
Thus the surefire way to shrink income inequality is to hurt the poor more than the rich. This seems to indicate that income inequality is not a good indicator of how the economy is doing. The best measure of how an economy is doing is unemployment, growth, and inflation. Currently unemployment is at near record lows, inflation has not been a problem in over 30 years, and growth is low but steady. Income inequality is a sign of a good economy.
So you’re saying that if there’s full employment and most people are earning minimum wages that’s a sign of a good economy? If someone earning $8/hr gets a 20 percent raise but his rents go up by 20 percent, his wage growth is a good barometer of the economy, eh? :rolleyes: There’s a reason why you can’t compare today’s wage growth to that of the past when there were better economic parity. People on the bottom don’t have the same kind of purchasing power, which is why we shouldn’t be happy with our “growth.” When Republicans pointed out that a lot of Americans were hurting under Obama’s tenure, they weren’t wrong - I would have said what I’m saying now. The difference is that Obama wanted a fairer economy and they didn’t. And they don’t want a fair economy now that Trump is president, but they know they need some justification for staying in power and conveniently, at least they can point to “full employment” and wage “growth”.
Full employment is the best measure of how an economy is doing for the most people. Wage growth has been higher than inflation for years now, and that is also a sign of a good economy.
A lot of Americans were hurting under Obama and a lot are hurting now. It is impossible to have a population of 325 million people where no one is having a bad time. However, all the meaningful data was that before the coronavirus, the economy was doing very well.
