Might we be to a point - or might we soon get there - where the disparity of wealth distribution, far from being the road to ruin, is the only thing keeping the USA from economic collapse?
Is anyone frank enough to argue in favor of the current trend to concentrated wealth? What’s their argument? Is it convincing?
On every major measurement, the Census Bureau report shows that the country lost ground during Bush’s two terms. While Bush was in office, the median household income declined, poverty increased, childhood poverty increased even more, and the number of Americans without health insurance spiked. By contrast, the country’s condition improved on each of those measures during Bill Clinton’s two terms, often substantially…
When Bill Clinton left office after 2000, the median income-the income line around which half of households come in above, and half fall below-stood at $52,500 (measured in inflation-adjusted 2008 dollars). When Bush left office after 2008, the median income had fallen to $50,303. That’s a decline of 4.2 per cent.
This is what the economy looked like before the Great Recession began in December 2007:
Commerce Department data released today show that the share of national income going to wages and salaries in 2006 was at its lowest level on record with data going back to 1929.[1] The share of national income captured by corporate profits, in contrast, was at its highest level on record.[2]
http://www.cbpp.org/cms/?fa=view&id=634
Okay, so what? What was your point in telling us this, other than to try play to your base?
That was actually the point I was trying to make.
First, let’s pretend that all of that is because of China, and all of that lose went to the Chinese. Who do you think is hurt more by losing $2000, a person in China or a person in the US? According to the World Bank: “In 1985 average income in China was $293; in 2006 the average income is $2,025.” So Americans on average lost 4.2%, but the Chinese on average gained 700%. Now, think back to everything you’ve ever read about progressive income tax and apply it here.
Second, let’s look at what that $52k median income looks like compared to the rest of the world:
Luxembourg on top as the richest country in the world, how much do you suppose they manufacture?
*Luxembourg reported a trade deficit equivalent to 441 Million EUR in December of 2010. Luxembourg is an export-intensive economy. The country has traditionally imported most of its consumer goods and exported industrial products (steel). Exports now also include chemical and rubber products, finished glass and the most profitable financial services. The nation remains dependent on energy imports. European Union is by far its largest trading partner, accounting for about 84% of exports and 87% of imports. *
What you need to be able to do is justify why Americans deserve $52k per year. Personally I think they’re overpaid, a remnant from when the US was only global super power. What do YOU think the median income should be, and why?
[quote=“New_Deal_Democrat, post:202, topic:578068”]
Again, so what? What is the point of presenting a statistic without any information to support it. Do you know what the correct share of wages is? And why did that number change? Did corporations learn to make more money using less labour? Is it possible automation played a role? What share of the nation income is spent on machinery, computers, and robotics?
In you comment #200 you asked for evidence that most Americans did not benefit from the Bush economy. I provided it. What I cannot do is make you care.
What I asked for was how much of decline there was, which you answered and I thank you. What I didn’t ask for was political rhetoric about the “Bush economy” vs the “Clinton” economy, why does it matter other than to poison the discourse.
Now, can you tell me what the median income is supposed to be? Is there an ideal? Are Americans *supposed *to have a higher median income than everyone else save Luxembourg?
Now, that stat should and will make Bush look pretty bad, but consider it in context:
The median household income increased during the two terms of Clinton (by 14 per cent, as we’ll see in more detail below), Ronald Reagan (8.1 per cent), and Richard Nixon and Gerald Ford (3.9 per cent).
So, while partisan hacks are trying to score points making Bush look bad, the reality is that median income is way up from the 70s.
I’ll ask again, what is the correct median income? And is it never supposed to fall?
My personal opinion is that (like housing prices) US income rose too high too fast. That is unsustainable and needs to correct. Think about the US as a company competing against other countries, why would you set up in the US knowing you’ll have to pay employees thousands of dollars more?
When debating with someone who obviously has different values and concerns than I do, I prefer to restrict my assertions to facts.
According to the CIA World Factbook, nine countries, including Norway, have higher per capita gross domestic products than the United States.
https://www.cia.gov/library/publications/the-world-factbook/rankorder/2004rank.html?countryName=United States&countryCode=us®ionCode=na&rank=10#us
The Gini Index measures economic inequality. The higher the index, the higher the degree of inequality. The higherst Gina index that the CIA World Factbook has record of is 70.7 for Namibia. The lowest is Sweden with 23.0. Now I think most of us would rather live in Sweden than Namibia.
https://www.cia.gov/library/publications/the-world-factbook/rankorder/2172rank.html?countryName=United States&countryCode=us®ionCode=na&rank=40#us
The Gini Index for the United States is 45.0. Now because 96 countries have lower Gini Indexes than the United States I doubt very much that we “have a higher median income than everyone else save Luxembourg.”
I even doubt that we have the second highest arithmetic average. Because you are a biomedical engineering researcher I assume you know the difference between median, and an arithmetic average. The median income is the income of the person in the middle. The arithmetic average is computed by adding everyone’s income, and then dividing it by the number of people.
The median income is considered a better way of evaluating the overall standard of living, than the average income. If the CEO of a company attends a Christmas party given for the janitors, the average income of those at the party is high, but the median income is low.
Back up a second. You mentioned that “Since 2000 the rich have continued to get richer even though the standard of living for most Americans has declined.”
I asked by how much, you provided a number; 4% or $2000 for the median income going from $52k to $50k.
So then I showed you how that compared to the rest of the world, and it turns out the US has the second highest. I also pointed out that even though it fell during Bush’s reign, it’s rose dramatically since Ford.
Again I’ll ask, what is it supposed to be?
That’s great as long as the facts have some relevance to the discussion, for example, why are you now bringing up per capital GDP? What does it have to do with that we’re talking about?
Now you’re introducing the GENI index, why?
So what is the correct Gini index? Have you looked through the list? Did you know that Ethiopia has a lower index than Australia, Canada, and the US? Where would you rather live?
You brought it up as your measure of how worse off Americans are. And yes, I’m aware of how stupid most of these statistics are. You made a big deal about Americans being worse off, so I asked how much worse off are they?
Turns out, they are still better off than they were in 1990 or 1980, despite a 4% dip.
ETA: "Median Family Income Up $6,000 since 1993: Economic gains have been made across the spectrum as family incomes increased for all Americans. Since 1993, real median family income has increased by $6,338, from $42,612 in 1993 to $48,950 in 1999 (in 1999 dollars). "
http://clinton5.nara.gov/WH/Accomplishments/eightyears-03.html
Which means a net increase despite losing ground during Bush. Americans are better off than they were 20 years ago.
One last problem with a lot of this is that it represents pre-tax income. Factoring in the Bush Tax cuts and doing a lot of sketchy math it’s possible that after-tax household income rose by $1000 from 2000-2006.
Stupid question, actually. To openly support that outcome, instead of just quietly working toward it, would be impolitic at best and treasonous at worst. I withdraw the question.
Well you do have one person on here who believes it’s justified because in his mind only 1 in 100 people generate wealth and everyone else is a bunch of “interchangeable carbon blobs”.
The wealthy investors and industrialists support that outcome - just not openly. If you assume the desire to concentrate wealth in the hands of the few, you can, however, predict everything that will get pushed by their lobbyists and their sycophant politicians.
You will know their agenda by the consistent end results of what they do.
Nearly all of the advances happened when Bill Clinton was president, and after he raised the top tax rate. Where are the jobs created by Bush’s tax cuts? Most are in other countries.
There is no point in trying to make you care about the growing income gap, so I will restrict myself to documenting it.
There have been times in the past of growing income inequality. I can think of the last quarter of the nineteenth century, the 1920s, and the 1980s. During these periods the rich got much richer, but most Americans advanced somewhat.
It needs to be pointed out, however, that the gains in per capita gross domestic product under Warren G. Harding and Calvin Coolidge were more than reversed under Herbert Hoover. When Harding entered office the per capita gross domestic product using 1996 dollars was $5,758. When Hoover left office that had declined to $4,804.
What is unprecedented about the current income divide is that the rich are getting richer, as the middle and working classes decline. If that continues, I do not think it is politically sustainable. There may not be a left wing backlash, as I would prefer. There may be a right wing backlash in the direction of something resembling fascism. In either case, there will be less of what conservatives think of as “freedom.”
This is why, perhaps you should be concerned.
You said the United States has the second highest median income in the world. If one considers The CIA Factbook to have credible data on this, that cannot be true.
I was going based off wiki
Just so you know, I don’t care what president did it, or what the letter after his name was. That’s the kind of smoke and mirrors that plays well with your little circle of friends, but here it’s just rhetoric.
From the data you presented, there were advances during the 90s to the tune of 14%, and a drop from 2001-2007 of 4%, meaning that Americans are still up.
Why are you now bringing up job creation and offshoring? Did your previous arguments run out of steam? Do we bitch about immigration next?
If you want me, or anyone else, to “care” about the “growing” income gap, you need to do more than claim to document it.
For example, the word “growing” is meaningless on it’s own. For it to means something it has to have a start point, what most people call “context.” Documenting something without context is pointless. Watch this:
My car is going 50mph. That is a fact. Will the velocity of my car destroy me? What would it take to make you concerned?
Velocity, like growth, is a rate of change. So first we need to establish where my car is: 50mph on a clear day holding up traffic on an interstate passing lane, or 50mph in the rain through a residential school zone full of children and puppies.
You seem insistent that the income gap is changing in the wrong direction, but you need to provide more data. Like median income, we’ve seen that when viewed from 2001-2007 it went down, but when viewed from 1970 to 2007 it’s up. The stock market is down this week, but up this year, and pretty much flat for the last decade (10 years not since 2010).
You can bitch and moan about the Gini index all you want, but it’s pretty much meaningless other than an interesting academic exercise. What is the correct number?
Did you know Egypt , Rwanda, and Ethiopia have a higher Gini index than the US. This unit of measure is probably the most bullshit and intentionally dishonest “fact” trooped out on this message board. I just got back from Tanzania (Gini of 34.6) and I’d rather be poor in the US than rich in there.
That’s right, the income gap grows and the cap shrinks. From everything you’ve told me it seems it shrunk a lot during the 90’s and it’s grown a bit in 2000, but over all we’re still better off. Which means, the income gaps needs to grow a hell of a lot more before it “destroys America.”
Of course it’s not. And you know what, neither is the opposite. You don’t want a situation where the rich are getting poorer. So are we looking at a long term trend or a short term set back?
If we’re going to talk about a “growing” income gap we need to know where it was before, and what it *should *be.
Next you need to figure out the why’s of it all. Why are the rich making money but not the middle class? What are the barriers faced by the middle class and whose fault is it?
Do we have a systemic problem, do you have to be part of the royal family to open a business or get a loan? Do you have to bribe a lot of officials to make something happen?
Again, I don’t give a shit about left vs right, scare quotes around freedom, or the use of the word fascism. If you want me to be as concerned as you are, just tell me what the correct income gap is.
I mean, it’s not like income inequality of this magnitude hasn’t caused major upheavals in America before.
Part of understanding economics involves understanding history. Not acknowledging the historical link between high income inequality and major unrest in America makes one’s supposed understanding of economics highly suspect to say the least.
This is also a good indicator of global unrest; the International Labor Organization and also the CIA actually predicted in 2010 that the recent massive increase in global unemployment would lead to unrest. Only a few months after that, Tunisia fell, and all hell broke loose in the Middle East. Not too many people know this, and even fewer people want to discuss or recognize it.
Yemen, Egypt and Tunisia - three countries who are host to major unrest - have lower levels of income inequality than the United States.
Egypt has more income equality than the US, so to try and suggest their recent revolution was the result of inequality is absurd.
Tunisia’s Gini index has improved since since 1985, and it’s lower than the US. It wasn’t income inequality that incited Mohammed Bouazizi to light himself on fire. It was the lack of economic freedom to earn a living. It was police corruption and ineptitude that kept him poor.
And you know what, part of understanding economics is learning economics. Otherwise you look like a guy that pretends to know history but fails to understand what the hell is going on.
You know what, Yemen has a lower Gini coefficient as well. It’s almost as if the Gini coefficient isn’t the be all and end all to happiness.
But don’t let that stop you from repeatedly trying to suggest that the revolutions in MENA are in some way related to the economic situation in the US.
Mohammed Bouazizi wanted capitalism and he wanted freedom to earn a living. He was trying to save up to invest in a business. Despite all the income equality in Tunisia he couldn’t get a simple car loan to buy a pick up truck.
Let people make money and equality will sort itself out.