Why have the rich gotten richer?

No, I'd say on average they came from somewhat better positions to their peers. I'm not saying it's impossible to go from nothing to great wealth, only that starting with something makes it much. much easier. I still completely disagree that "most of the top 1% came from nothing".

 

I already know other people's opinions? That is news to me.

 

I'm not Rich, but I'm sure as hell doing great ...

I was in Vegas during the first two weeks of March in 2009 ... so I got to see the Freakout of the Market hitting the Low 6k ...

 

<<MOD EDIT - Reply to Deleted>>

To the topic, the "wealth inequality" lies proliferated by the gov-edu-union-contractor-grantee-trial lawyer-MSM Complex, mostly by its academic and union branches, are among the most toxic and odious of the many they repeat in their rotten advertising campaign towards self-benefit at taxpayer expense.

A. Wealth inequality of late is a function of two trends, one very good and a function of free, voluntary enterprise, one bad and to be blamed on the involuntary fiat Complex. First, we are in a massive technological boom more compressed than any in human history. This began with the industrial revolution, then exploded in the early 20th century with electrical tech proliferation. As if that explosion weren't enough, it has been compounded by the computer and telecomm explosions of the last 30 or so years. When people line up to buy Iphones (and 1000 other examples) making the innovators and capitalists who proliferated them into commodity markets rich, that's a very GOOD thing. I'd rather have my internet service than $2000 a month, yet it only costs $60. Same for 100 other things that make our lives better, from refrigeration and lower food costs resulting, to having supercomputers in our hands for pennies. This kind of wealth inequality, where common people have things that kings could only dream of a few decades ago, is benign and healthy. That wealth was not "taken" from anyone in the way the Complex takes, it was voluntary traded for miracles.

The "bad" aspect of wealth inequality is the ravaging of our manufacturing and low skilled labor base. Some of this was unavoidable. Lots of it was caused by Complex greed, government and unions. The average taxpayer works at least half the year to pay for the Complex at all levels. This is absurd, and makes us less competitive in the global marketplace. We've known the low skill labor base was going to be internationalized for 50 years, and what has our wise government/Complex done? Hollered for more more more at every turn.

B. But it's not as bad as they make it out to be. Two of the biggest rotten planks of their many lies are that wealth is a static, finite pool that is "divvied up," and that someone got "yours" wrongfully (that's actually true as applied to the Complex, those who pay for it receive PITIFUL value in return for extraction at the end of a gun barrel). The other plank of their lie narrative is that "the rich" and "the poor" are static, fixed groups over time. The FACT is that other than outliers (the rich heirs that make up a tiny fraction of a % of the population that they want you to believe comprise "the rich") THE RICH AND POOR IN THE U.S. ARE THE EXACT SAME PEOPLE, just at different points in time and their careers. Other than a few outliers, Americans start in similar situations economically, and their CHOICES and REPEATED BEHAVIORS are far more determinative of whether they will be rich or poor than any preordained castes the Complex preaches. Kids who start out cooking fries can achieve anything they choose in life with the key notion being CHOICE.

C. Finally, and most importantly, the way the Complex liars calculate "wealth" is itself an obvious lie. They invariably omit real estate in their fabrications that "X% owns Y% of the wealth," and also calculate financial wealth as if it is tangible rather than abstract, all dollars (an abstraction, but a lesser one than share values). Any college freshman in Econ 102 should be able to see through this, yet their "professors" promulgate lies with a straight face, smiling behind their crooked, Marxist, statist hands. A vast majority of the "concentrated wealth" that the Complex yammers on about isn't "dollars" that could be redistributed, but highly abstract equity shares subject to ever-increasing multiples in the U.S. Do the Complex liars in academia and elsewhere ever divide out the vast multiples applicable to financial wealth to convert it into actual dollars? Of course they don't, they include 10 million shares of Amazon, fluffed by a PE ratio of 20-30 as if it's actually convertible into that many dollars. Folly of the nth degree, yet these aren't honest, good people we are talking about, but members of a greedy, self-interested crime family that would make the Sopranos blush. At least the Sopranos did their own dirty work. Complex creeps and thugs, searching for every more unearned salary for doing the work of 1/3 of a private sector worker, fat gov-jobs for their family members majoring in "communications" and "social work," unearned grants, union benefits, pension benefits private sector folks can't dream of, etc.

It's not, and never has been about "the poor" with these folks, but how much they can take from YOU, the taxpayer, for THEMSELVES. Everything else is whitewash. Their constant, obvious, indeterminate lies about "wealth inequality" bring this point home.

 

Care to discuss the links?

 

Made me look!

 

He wanted answers, I found millions in seconds.

 

^ Thread win.

 

In the future he should let you be his mentor instead of me

 

But anyway...

Wealth = power.

1% having inordinate power?

What could go wrong?

For the rest, see any one of millions of links available via Google and other search engines.

I posted several.

 

You said it Mac!

 

As you can see in your chart, the year in which wealth disparity was the lowest was 1970. After 1970, disparity continues to rise. So what happened in 1971 that caused income disparity to increase so much?

 

Uhm...Disney World opened? Disney is evil, after all...

 

Folks, tax policy.. up, down, sideways, within the bounds of 100 years or so of factual U.S. tax policy history, actually matters very little to how much "wealth" or "income" a middle class person has. It matters -very much- to the gov-edu-union-contractor-grantee-trial lawyer-MSM Complex though, because it correlates directly with the bloated fiat benefits they drain from the productive elements of society. THAT is why the Complex and its minions are constantly on about tax policy... it's for THEM at YOUR expense, not for "the poor" or "vanishing middle class" but for THEM at YOUR expense. Never forget that while reading their whitewash distortions.

"Trickle down" is Complex speak jargon, not a real word, not a real economic concept. Anyone using it is instantly discredited as substituting propaganda for reasonable adult policy discussions... including Republicans and ex Presidents... or hell anyone, doesn't matter who uses it, when you hear it, you are listening to an ignorant person... or being conned. No option C. Did it work? Are they fooling you?

Further, ANY purported "analysis" of U.S. tax policy history and reform that includes only factors like the above ^, and omits loophole closure, AMT beefing up, deduction limitation, shelter disallowing, is so distorted as to be a purposeful LIE. The Reagan era tax reform did reduce and streamline brackets... but it also brought VAST amounts of previously exempted, untaxed income into those brackets. Anyone who doesn't mention this necessary context is running a con. Finally here, unions weren't "busted," they became irrelevant in the booming SERVICE and TECH economy. Reagan fired the ATCs for violating federal law, not to "bust" them. Public unions have grown like lice in the intervening period.

ANY statement that "the very rich effectively do not" pay FICA is so full of weasel words and Complex speak that anyone of any paygrade should be able to puzzle it out, but in case not, note that they will fluidly switch from bogus notions like "1%" to "very rich" on a dime... and insert more weaseling via "effectively." Why? Because they know that the 10-1% pay huge amounts of FICA tax. Instead of acknowledging this, they switch their jargon to nebulous outliers like "very rich" in a purposeful effort to deceive. The average high earner pays some over half the percentage of their income in FICA that the lowest earner pays, and gets royally SHAFTED when it's time to withdraw when the percentages are converted into $$ and TVM is applied. FICA is a GREAT deal for lower and middle incomes in those real terms, a shitty deal for high earners. The truth is that FICA is very progressive, extremely easy to qualify for basic benefits, and high income payers do not get anything remotely resembling an equitable return when real factors are considered.

Oh, and another omission/distortion, though it's common to call FICA "payroll taxes," that's not AT ALL how it was sold to the public, or really what FICA is or ever has been. It was sold as a "trust fund" not as a tax, and any truth-teller interested in precision and accuracy will refer to FICA contributions as just that, "contributions" to distinguish them from income taxes, and not try to muddy by calling them "payroll taxes." Like many Complex jargon examples, the nonleft has unwisely let them get away with these types of semantic tricks without question and ignorantly uses the inaccurate, slanted Complex jargon... until the internet, which is gradually exposing their lies. It's called a "tax" by everyone as shorthand, but isn't really a "tax" though, don't let that fool you into allowing them to lump it in with income tax. Again, did they fool you?

Something other than Reagan's tax policy happened in the early 80s. That something was MSDOS, which sent the previous electro-tech explosion into the stratosphere, made many people filthy rich (Gates, Bezos, 100,000 others) because of innovation miracles that the public wants. That is exchanging one type of wealth for another, not disadvantaging the middle class, quite the opposite in fact. You can live without the net, computers, five years of extra life, telecomm, etc., and sit and count the dollars you save. Trading those dollars voluntarily and making someone rich in the process doesn't mean they -took- anything from you. YOU initiated a VOLUNTARY trade of an abstraction in exchange for concrete wealth. You WON, not lost.

Finally, charts and graphs based on their doctored numbers are meaningless twaddle just like their rigged polls. Our CHILDREN are SO RICH that what would be comfortable pop celebrities in the past are billionaires today. Our middle class is SO RICH that whole industries catering to it, casual dining for example, where people crowd into Olive Garden to spend $25 a head on ONE MEAL, have sprung out of nothing over the last 40 years. (Remember when eating out several nights a week was something only rich people could afford? I do) But sure, that's all "the rich" packing those restaurants, huge big box specialty retailers and toy stores.

Want to accurately measure how "rich" the middle class of a country is more accurately than cooked charts and graphs? Simple, measure the growth in revenue from childrens' luxury goods, toys, video games, movies, phones, Taylor Swift tickets, over time, adjusting for population growth. THAT'S a far more accurate measure of how rich or poor our middle class is; based on the price and growth of Disney, our middle class is in fact stinking, filthy rich compared to recent past times. Don't fall for their bogus charts about "% of income." They lie through their teeth in calculating "wealth," (see prior long post) why wouldn't they lie in calculating income? (they do)

Remember, it's not about "the poor." It's not about the "vanishing middle class." It's not even about "soaking the rich" (whom they know full well can't pay for their do little, Complex fiat lifestyles and unearned perqs).

It's quite simply about taking more from YOU, the -real- middle class, for THEM your gov-edu-union-contractor-grantee-trial lawyer-MSM Complex parasites. That's the point of all their cons, semantic BS and dissimulation. Never forget it.

 

Another great post. Just as I've come to expect from you.

I think you would reach more people if you could pare down your posts. "Too Long; Didn't Read" is a real phenomenon.

 

Those are commonly raised arguments. However, I don't think they explain the explosion in inequality we've seen starting in 1981.

First, empirically, the timing doesn't fit. Immigration, globalization, and automation didn't suddenly start happening at drastic levels in 1981 which would correlate to income inequality suddenly skyrocketing in 1981. We had these things happening before 1981 and since.

Let's consider immigration and women entering the work force. Basically, what you are arguing is that growth in the labor force is a reason why median incomes have not increased. Superficially, that argument seems plausible. If you have an increase in the labor supply, economics tells you that an increase in supply decreases the price of the supply.

Here's the civilian labor force:



As you can see, we do not see a spike in the size of the labor force happening in 1981 that would explain why income inequality started skyrocketing. Indeed, since about 2000, we've seen a curtailing of labor force growth, which should mean that we should have seen median income rising more strongly starting around 2000, which has not been the case.

While labor force growth might superficially seem to be an explanation, it don't think they make a lot of sense as an explanation in the long term. Looking simply at the growth of the labor force is only looking at part of the supply and demand equation. The other side is demand. When you increase the number of workers, you have more people earning income, more people working means more people spending creating more overall demand for products and services, and thus more production and jobs.

We've seen that. Economic growth since 1981 has been overall pretty good, though it has slowed in the last couple decades (for reasons IMO I can explain later). But the basic problem hasn't been lack of economic growth, but that virtually all that growth has gone to the rich, and virtually none to the bottom 90%.

Now, I'm not saying supply and demand do not matter. They do. When there is a recession, there is less demand for workers and you see median incomes fall. When the economy is strong, there is more demand, and median incomes will start to rise. We've seen that cycle several times, before 1981 and after. But the difference is that prior to 1981, those cycles had an affect, but over the long term they didn't preclude working folk from sharing in the growth and prosperity they helped create. After 1981, you do. That isn't explained by the growth in the labor force.

Automation is another factor, but we've had automation before and after 1981. There wasn't a sudden explosion in automation in 1981 that explains why income inequality started skyrocketing. Where we have seen automation have an effect is the type of jobs. Automation has had its most profound effect in manufacturing. While manufacturing has continued to grow, it has grown with fewer workers. There has been a dramatic shift away from manufacturing jobs to service jobs. That has had an effect on wages. Manufacturing jobs traditionally were much more unionized, and unions changed the supply and demand equation from an individual worker to workers as a group. As a consequence, folks working manufacturing jobs got paid salaries not based simply on supply and demand for an individual worker, but based more upon the value of the workers as a group. Those higher incomes bolstered middle class incomes has a whole, and generated tremendous purchasing power. The economy is based 70% on consumption, and when you have working class incomes increasing, you have more spending and more economic growth.

But as we have transitioned away from manufacturing, fewer and fewer working people have group representation. Union participation has dropped from over 30% to under 10%. People working in service industries have, not coincidentally IMO, not had group representation, and have not had the ability to leverage wages commensurate with what is being produced. The workforce has transitioned to more a supply and demand for individual workers, as opposed to supply and demand for a group of workers. This phenomenon has coincided with some of the other factors I mentioned -- minimum wage levels have not kept up with inflation, much less economic growth. Overtime law (until recently) were not kept up with the times and enforcement was lax. Consequently, real median incomes stagnated, and with it, the purchasing power of the middle class. Less spending power = less buying = less demand = less production. For a while, middle class folks made up some of the difference by borrowing more and pulling equity out of their homes, but those sources have tapped out. It's no coincidence, IMO, that as middle incomes have stagnated, we've seen a trend of more sluggish economic growth.

Globalization is a related issue. First, whatever effect it has, IMO has been overstated. Net imports over exports represents only a small fraction of the total US economy.
It is true that foreign producers have become more competitive in recent decades, though I am not aware of any incidence of globalization drastically expanding starting in 1981 that would correlation with income inequality exploding at that time. However, if foreign competition was the real problem, we'd expect to see US GDP stagnating as a result. If stagnation of US GDP were the effect, we'd see stagnation of all income levels. Of course, that has not been the case. We've had good economic growth, and incomes at the top have skyrocketed. That economic growth just has not been shared with the 90% of working Americans. Like automation, the effect of globalization has had the greatest impact on manufacturing, resulting in loss of jobs that were, in general, higher paying union jobs, and a transition into service jobs, which, as explained above, have not not been characterized by group representation of workers.

So, in sum, IMO those factors you mentioned by themselves, while I'm not saying have had no effect, do no explain the long term trend of income inequality we saw exploding starting in 1981.

 

Simply not true. Real incomes and wealth of the top 10%, and especially top 1%, 1/10% and 1/100% have skyrocketed as has their real wealth.

 

Sure it would. If you raised taxes on the rich and cut them for the middle class, you'd have more spending power in the middle classes driving economic growth.

 

Discussed above. We did not have a huge explosion in immigration in 1981 corresponding the the explosion in income inequality.

 

We have continued to elect politicians (Republicans) that have prioritized "trickle down" economic policies designed to pamper the richest at the expense of the middle classes.

 

One, Obama inherited the worst recession in 80 years that both affected income distribution and his ability to address these issues. After only two years Republicans got control of the House and were able to stymie further progress.

 

I don't have any problem with the rich getting richer. The problem is the rich getting richer at the expense of the 90% of working Americans.

 

The why is just natural distribution of resources. If you look at the top 1% and compare them to the other 99%, it seems completely ridiculous. However, if you look at the top 20%, you'll find that they have 80% of the wealth. In that top 20%, you'll find the same distribution with 20% of that 20% having 80% of the wealth.

https://economics.mit.edu/files/10517

When lefties complain about wealth inequality, they aren't actually worried about anything other than having it taken from the rich and given it to them. It's what they do, but asking them to explain the actual reasons why so few are rich and so many are poor isn't going to get you anywhere because they simply don't care.

 

I'm not sure what chart you are looking at.



This chart does not show income inequality exploding in 1971. Between about 1950 and 1980 incomes of the top 10% stayed within a band of about 32-35% of total income. 1981 is when it skyrocketed out of that band.

 

Look at 1970. The triangle is at the lowest point in the chart. Then it begins to rise. What happened in 1971 that caused it to rise?