I think that the nature and causes of inequality are more important than the magnitude. Fixation on the Gini index leads to ridiculous claims like:
Income inequality is more severe in the U.S. than it is in nearly all of West Africa, North Africa, Europe, and Asia. We're on par with some of the world's most troubled countries, and not far from the perpetual conflict zones of Latin American and Sub-Saharan Africa.
That's nonsense, of course. Third-world inequality comes from the poor being very poor. American inequality comes from the rich being very rich. Inequality as such isn't a problem---poverty is---and so it just doesn't make sense to say that inequality in the US is more severe than it is in West Africa.
Attempts to lower inequality through progressive taxation and other forms of wealth redistribution can have the perverse effect of making poverty worse in the long run. When you take money from people with a high marginal propensity to save (i.e., most rich people) and transfer it to people with a high marginal propensity to consume (i.e., most poor people), you get less savings, which means less capital available to fuel long-run growth, which means more poverty twenty years out.
Again, there's no reason to believe that what we've been seeing for the past few years is the new normal. We saw much worse during the Great Depression, and we recovered from that. The real concern is the drag the ever-expanding welfare state may have on the economy, as that truly is unprecedented.
Also, it's worth noting that as inequality has gone up within most first-world countries, global inequality has been declining. I suspect that these two phenomena are related. Globalization allows people to get much richer than they have in the past. There's just more money to be made when your market is the whole world rather than just your own country or region. Meanwhile, first-world unions are no longer able to extract rents on their proximity to holders of capital, so their wages haven't grown as quickly. At the same time, this has opened up new opportunities to the global poor, causing a decline in global poverty and inequality.
I posted a chart showing that this is not the case.
When you say “government transfers as a percentage of total personal income”, what you mean is the number of people who have nowhere else to turn. They’re desperately competing for jobs, knowing there’s a 5:1 unemployed:openings ratio in the job market.
While this number is somewhat correlated with the state of the macroeconomy, there's been a secular upward trend towards a bigger and bigger share of personal income coming from government social programs, even in good times.
TPoFYIGM
As I've pointed out numerous times, this is a baseless smear. The Democrats are proposing tax increases that would only affect a small minority of either party. Opposition to tax increases on those who make more than you isn't FYIGM, it's MYOB.
Especially when the parasite Jews, those who add no value to anything while skimming money as the middle men, are protected while everyone else suffers.
Whoops. I might have slightly misquoted you there. Left-wing rhetoric and antisemitic rhetoric look so similar that I get confused sometimes.
This makes about as much sense to me as asking how bad the state of heterosexual marriage will have to get before I abandon my support for homosexual marriage. There's just no causal link. Maybe you could outline your model of what you think is going on here, because I'm not seeing it.
Why should we vote for our own potential serfdom?
This is tinfoil-hat stuff. Serfdom didn't come about because corporate profits were high---it came about because vassals had legal ownership rights over their serfs.
Not only is it not something to be worried about, but it's something to be happy about. Another term for corporate assets is "capital stock," and it's what makes long-run economic growth possible.
By the way, there is one trend in personal income that has been increasing unabated for half a century: Government transfers as a percentage of total personal income, up from 6.3% in 1963 to 17.7% in 2011, increasing nearly monotonically. Corporate profits wax and wane, but welfare is always in season.
I don't see anything sinister here. If corporations could find ways to employ more people profitably, they would do so.
Here's a chart showing corporate profits as a percentage of GDP. Some things to note:
1. The current profit level is high but not unprecedented.
2. Corporate profits rose in tandem with the unemployment rate during the '70s. So that's not unprecedented, either.
3. It's common to see profits rising sharply following a recession. This makes sense, as firms cut unprofitable divisions and employees during the recession, making them more efficient and profitable when the recovery begins.
Also, corporate profits aren't necessarily a great proxy for inequality. Sure, rich people invest in stocks, but they also invest in bonds. Personal interest income, which accounts for the lion's share of personal investment income, is down in real terms over the last decade. The spike in corporate profits is not reflected in total personal investment income as a share of total personal income, which peaked in the late '80s and is currently slightly below where it was in 2001 (Source: Table B-29 of the 2012 Economic Report of the President).
Extrapolations from short-term trends are unreliable. Given the magnitude of the disruption to the economy, it's not surprising that it's taking a while for things to shake out, but I think it's premature at best to suppose that this state of affairs will be permanent.
I just realized that that could be taken as referring either to clawback's comment or to economic subsidies. It's like posting two comments for the price of one.
I think the idea is that the election was a referendum on Walker's policies, and thus of national significance. If these policies proved successful in the eyes of the voters of Wisconsin, then this could lead to similar policies being enacted in other states.
Eh...I guess I should point out where you're wrong, even though your comment was dickish enough that you don't really deserve it.
First, you're conflating the effects of living in a low-capital economy with the effects of the absence of left-wing policies. Living in a low-capital economy sucks, no matter how you slice it. Even if you were to take all the wealth in the country circa 1900 and redistribute it equally, everyone would still be really poor. The dramatic improvements in typical living standards over the past century have been due overwhelmingly to the increase in the capital stock and to technological advances, not to unionization or to the institution of left-wing labor laws.
Second, the idea that not being directly paid for dead work is "exploitation" (an emotionalism that has no place in reasoned discourse) is nonsense. Do you think mine owners got paid for dead work? Of course not. They got paid if and only if they were able to extract and sell enough coal to cover their expenses. Do you think they were being exploited? Are industrialists exploited when they're not paid for building their factories? Are venture capitalists exploited when they don't get paid for bad investments? Are pharmaceutical companies exploited when they're not paid for drugs that don't get FDA approval?Get
And of course, miners were paid indirectly for dead work---it's just what they had to do to get access to paying work. Getting paid directly for dead work is a common perquisite of work for hire, and probably better than the alternative, but its absence is not inherently exploitative.
The extent to which genetics and environment respectively influence IQ is entirely orthogonal to the question of whether it's a good measure of intelligence.
The concept of multiple intelligences has been around for decades now and any discussion of intelligence is pointless without that.
As far as I can tell, the MI hypothesis is at best untested. Gardner's FAQ on the topic doesn't do much to reassure me. That doesn't speak well of a hypothesis that's enjoyed the popularity it has for thirty years. Here's a study finding substantial g-loading for four of Gardner's proposed intelligences, which supports the general intelligence hypothesis.
IQ is the best measure of intelligence we have, and appears to be a pretty good one, given its predictive power for performance over a wide range of cognitive tasks. It's very clearly measuring some sort of cognitive ability---to say that this is not "intelligence" strikes me as little more than semantic quibbling.
"Destroy our Future" sounds like something a fourth-grader would come up with. So no, I wouldn't take you seriously. But I wouldn't object to calling it something more neutral, like "Romney's SuperPAC." In fact, that's probably what I'd call it myself.
It's worth noting that "Democrat Party" isn't inherently pejorative in the way that "The Party of Stupid and Evil" is. It's a perfectly valid description of a party whose members are Democrats. It's perceived as pejorative solely because it's historically been used by said party's opponents. In fact, I had to look it up because it wasn't immediately obvious to me why this would be a term one might wish to use to offend.
To give a historical example, the predecessor of the Republican Party was the Whig Party, not the Whiggish Party. There's also the Constitution (not Constitutional) Party and an Independence (not Independent) Party. The UK has the Labour Party, of course, not the Laborious Party.
The problem is that the term "democratic" has highly positive connotations in the popular imagination. I want a term to refer to the Democratic Party that doesn't invoke those connotations. I'm not a big fan of "Democrat Party," though. I usually just refer to them as "Democrats" or "the Democrats." You don't really have the same problem with "Republican," which is not typically used as a synonym for "fair" or "equitable." If the Republicans decided to officially rebrand themselves as the Space Awesome Party, you would probably rightly object, even though it's not really all that much less descriptive than "Democratic Party."
Under the banner of “All’s Fair in Love and War” I have to admit it was a neat trick. Sucks to be me and all that.
Given that the left stole the label from actual liberals, and then sullied it by association with illiberal economic policies, I can't say I don't derive a bit of schadenfreude from this.
To me, it just serves as a signal that the speaker either doesn’t understand English grammar...
No, it's a perfectly valid grammatical construction. A noun may be used to modify another noun., forming a compound noun.
It goes back to 1940, and it wasn't because it rhymed with "rat," but rather to emphasize the undemocratic nature of the Democratic Party at that time.
Calling BS on the Foxconn-suicide connection. There was a cluster of sucides, but even considering only the year during which that cluster occurred, the rate of suicide for Foxconn employees didn't exceed the rate for the general population.
My tentative conjecture is that it was related to Foxconn's practice of issuing payments to the families of employees who committed suicide, i.e., that one employee committed suicide, and the lure of the payment tipped the balance for a handful of marginally suicidal employees.
*Comment archive for non-registered commenters assembled by email address as provided.
On “The League’s Inequality Symposium Starts Tomorrow”
I stand by that comment, but I'll respect your request that I not do it again.
"
I think that the nature and causes of inequality are more important than the magnitude. Fixation on the Gini index leads to ridiculous claims like:
Income inequality is more severe in the U.S. than it is in nearly all of West Africa, North Africa, Europe, and Asia. We're on par with some of the world's most troubled countries, and not far from the perpetual conflict zones of Latin American and Sub-Saharan Africa.
That's nonsense, of course. Third-world inequality comes from the poor being very poor. American inequality comes from the rich being very rich. Inequality as such isn't a problem---poverty is---and so it just doesn't make sense to say that inequality in the US is more severe than it is in West Africa.
Attempts to lower inequality through progressive taxation and other forms of wealth redistribution can have the perverse effect of making poverty worse in the long run. When you take money from people with a high marginal propensity to save (i.e., most rich people) and transfer it to people with a high marginal propensity to consume (i.e., most poor people), you get less savings, which means less capital available to fuel long-run growth, which means more poverty twenty years out.
Again, there's no reason to believe that what we've been seeing for the past few years is the new normal. We saw much worse during the Great Depression, and we recovered from that. The real concern is the drag the ever-expanding welfare state may have on the economy, as that truly is unprecedented.
Also, it's worth noting that as inequality has gone up within most first-world countries, global inequality has been declining. I suspect that these two phenomena are related. Globalization allows people to get much richer than they have in the past. There's just more money to be made when your market is the whole world rather than just your own country or region. Meanwhile, first-world unions are no longer able to extract rents on their proximity to holders of capital, so their wages haven't grown as quickly. At the same time, this has opened up new opportunities to the global poor, causing a decline in global poverty and inequality.
"
Corporate profits seem to wax and wax
I posted a chart showing that this is not the case.
When you say “government transfers as a percentage of total personal income”, what you mean is the number of people who have nowhere else to turn. They’re desperately competing for jobs, knowing there’s a 5:1 unemployed:openings ratio in the job market.
While this number is somewhat correlated with the state of the macroeconomy, there's been a secular upward trend towards a bigger and bigger share of personal income coming from government social programs, even in good times.
TPoFYIGM
As I've pointed out numerous times, this is a baseless smear. The Democrats are proposing tax increases that would only affect a small minority of either party. Opposition to tax increases on those who make more than you isn't FYIGM, it's MYOB.
Especially when the parasite Jews, those who add no value to anything while skimming money as the middle men, are protected while everyone else suffers.
Whoops. I might have slightly misquoted you there. Left-wing rhetoric and antisemitic rhetoric look so similar that I get confused sometimes.
"
This makes about as much sense to me as asking how bad the state of heterosexual marriage will have to get before I abandon my support for homosexual marriage. There's just no causal link. Maybe you could outline your model of what you think is going on here, because I'm not seeing it.
Why should we vote for our own potential serfdom?
This is tinfoil-hat stuff. Serfdom didn't come about because corporate profits were high---it came about because vassals had legal ownership rights over their serfs.
"
Not only is it not something to be worried about, but it's something to be happy about. Another term for corporate assets is "capital stock," and it's what makes long-run economic growth possible.
"
By the way, there is one trend in personal income that has been increasing unabated for half a century: Government transfers as a percentage of total personal income, up from 6.3% in 1963 to 17.7% in 2011, increasing nearly monotonically. Corporate profits wax and wane, but welfare is always in season.
"
I don't see anything sinister here. If corporations could find ways to employ more people profitably, they would do so.
Here's a chart showing corporate profits as a percentage of GDP. Some things to note:
1. The current profit level is high but not unprecedented.
2. Corporate profits rose in tandem with the unemployment rate during the '70s. So that's not unprecedented, either.
3. It's common to see profits rising sharply following a recession. This makes sense, as firms cut unprofitable divisions and employees during the recession, making them more efficient and profitable when the recovery begins.
Also, corporate profits aren't necessarily a great proxy for inequality. Sure, rich people invest in stocks, but they also invest in bonds. Personal interest income, which accounts for the lion's share of personal investment income, is down in real terms over the last decade. The spike in corporate profits is not reflected in total personal investment income as a share of total personal income, which peaked in the late '80s and is currently slightly below where it was in 2001 (Source: Table B-29 of the 2012 Economic Report of the President).
Extrapolations from short-term trends are unreliable. Given the magnitude of the disruption to the economy, it's not surprising that it's taking a while for things to shake out, but I think it's premature at best to suppose that this state of affairs will be permanent.
On “Lard Pastry Crust”
More like a yum-times food. Am I right, guys?
On “AUCTIFICUS AEQUALITAS”
Correction: You ledol.
On “Economic Development Subsidies”
Oh, and to clawback personally! A three-fer!
"
I just realized that that could be taken as referring either to clawback's comment or to economic subsidies. It's like posting two comments for the price of one.
"
I really don't have the linguistic skills needed to express the full depth of my contempt for this kind of bullshit.
On “On the Shadow Empire”
I think the idea is that the election was a referendum on Walker's policies, and thus of national significance. If these policies proved successful in the eyes of the voters of Wisconsin, then this could lead to similar policies being enacted in other states.
On “You Know Folks, Tom Is Very Clearly Right”
Eh...I guess I should point out where you're wrong, even though your comment was dickish enough that you don't really deserve it.
First, you're conflating the effects of living in a low-capital economy with the effects of the absence of left-wing policies. Living in a low-capital economy sucks, no matter how you slice it. Even if you were to take all the wealth in the country circa 1900 and redistribute it equally, everyone would still be really poor. The dramatic improvements in typical living standards over the past century have been due overwhelmingly to the increase in the capital stock and to technological advances, not to unionization or to the institution of left-wing labor laws.
Second, the idea that not being directly paid for dead work is "exploitation" (an emotionalism that has no place in reasoned discourse) is nonsense. Do you think mine owners got paid for dead work? Of course not. They got paid if and only if they were able to extract and sell enough coal to cover their expenses. Do you think they were being exploited? Are industrialists exploited when they're not paid for building their factories? Are venture capitalists exploited when they don't get paid for bad investments? Are pharmaceutical companies exploited when they're not paid for drugs that don't get FDA approval?Get
And of course, miners were paid indirectly for dead work---it's just what they had to do to get access to paying work. Getting paid directly for dead work is a common perquisite of work for hire, and probably better than the alternative, but its absence is not inherently exploitative.
"
I guess I’m just tired of ignorant people....
Physician, heal thyself.
"
The extent to which genetics and environment respectively influence IQ is entirely orthogonal to the question of whether it's a good measure of intelligence.
The concept of multiple intelligences has been around for decades now and any discussion of intelligence is pointless without that.
As far as I can tell, the MI hypothesis is at best untested. Gardner's FAQ on the topic doesn't do much to reassure me. That doesn't speak well of a hypothesis that's enjoyed the popularity it has for thirty years. Here's a study finding substantial g-loading for four of Gardner's proposed intelligences, which supports the general intelligence hypothesis.
"
Can you point me to one you think is good, Kazzy? Most of the criticisms I've seen have been pretty weak.
"
IQ is the best measure of intelligence we have, and appears to be a pretty good one, given its predictive power for performance over a wide range of cognitive tasks. It's very clearly measuring some sort of cognitive ability---to say that this is not "intelligence" strikes me as little more than semantic quibbling.
"
"Destroy our Future" sounds like something a fourth-grader would come up with. So no, I wouldn't take you seriously. But I wouldn't object to calling it something more neutral, like "Romney's SuperPAC." In fact, that's probably what I'd call it myself.
It's worth noting that "Democrat Party" isn't inherently pejorative in the way that "The Party of Stupid and Evil" is. It's a perfectly valid description of a party whose members are Democrats. It's perceived as pejorative solely because it's historically been used by said party's opponents. In fact, I had to look it up because it wasn't immediately obvious to me why this would be a term one might wish to use to offend.
"
To give a historical example, the predecessor of the Republican Party was the Whig Party, not the Whiggish Party. There's also the Constitution (not Constitutional) Party and an Independence (not Independent) Party. The UK has the Labour Party, of course, not the Laborious Party.
"
Shouldn't that be beam and not mote?
"
The problem is that the term "democratic" has highly positive connotations in the popular imagination. I want a term to refer to the Democratic Party that doesn't invoke those connotations. I'm not a big fan of "Democrat Party," though. I usually just refer to them as "Democrats" or "the Democrats." You don't really have the same problem with "Republican," which is not typically used as a synonym for "fair" or "equitable." If the Republicans decided to officially rebrand themselves as the Space Awesome Party, you would probably rightly object, even though it's not really all that much less descriptive than "Democratic Party."
"
Under the banner of “All’s Fair in Love and War” I have to admit it was a neat trick. Sucks to be me and all that.
Given that the left stole the label from actual liberals, and then sullied it by association with illiberal economic policies, I can't say I don't derive a bit of schadenfreude from this.
To me, it just serves as a signal that the speaker either doesn’t understand English grammar...
No, it's a perfectly valid grammatical construction. A noun may be used to modify another noun., forming a compound noun.
"
It goes back to 1940, and it wasn't because it rhymed with "rat," but rather to emphasize the undemocratic nature of the Democratic Party at that time.
"
Calling BS on the Foxconn-suicide connection. There was a cluster of sucides, but even considering only the year during which that cluster occurred, the rate of suicide for Foxconn employees didn't exceed the rate for the general population.
My tentative conjecture is that it was related to Foxconn's practice of issuing payments to the families of employees who committed suicide, i.e., that one employee committed suicide, and the lure of the payment tipped the balance for a handful of marginally suicidal employees.
*Comment archive for non-registered commenters assembled by email address as provided.