Income gains 1947 to 2007. Looking for honest answer.

[mshan]

Ever see Jamie Johnson's "Born Rich"? (he is Johnson & Johnson heir)

He said basically as a given that all of the industrialists of Industrial Revolution era were crooks and criminals; that is how they got their wealth. Someone like Warren Buffett is not the norm.

 

[mshan]

Princeofwands:

That second graph was an afterthought (just to show wage growth during Clinton years and Bush years).

Obviously productivity has skyrocketed in recent decades, so profits should go up higher than wages, but I doubt not to this extent, if we hadn't had 8 years of government of, for, and by the corporation (Cramer also used to crow about how Bush administration gave them every imaginable tax break, loophole, etc.) I doubt profits would have gone so parabolic without a serious assist from the Bush administration.

 

[glenn1]

glenn1:

Either graph, look what happened around 2003 or so (we went parabolic).

There was too much cheap money sloshing around the globe, probably leading directly to the housing bubble... (which I think started around 2003, picked up steam in 2004, and really went out of control in 2005 or so, and really just started to turnover around 2007, I think).

<shrug> To me, it looks like it's not that far off the long-term trend line, certainly not the several standard deviations off the trend that would allow it be called parabolic. Here's another look, and it certainly seems benign to me in this view as well.

 

[PrinceofWands]

Princeofwands:

That second graph was an afterthought (just to show wage growth during Clinton years and Bush years).

Obviously productivity has skyrocketed in recent decades, so profits should go up higher than wages, but I doubt not to this extent, if we hadn't had 8 years of government of, for, and by the corporation (Cramer also used to crow about how Bush administration gave them every imaginable tax break, loophole, etc.) I doubt profits would have gone so parabolic without a serious assist from the Bush administration.

I just wanted to point out some thoughts about wage charts like that which always seem to show up in econ threads. Charts shouldn't give final answers, they should inspire us to more correct questions.

 

[glenn1]

But there's nothing logarithmic about it. To adjust the scale that way would be very sneaky.

It's the Y-Axis that's in logarithmic scale in that chart, and it's not sneaky at all. It's an extremely common charting depiction in the financial world, probably moreso than the arithmetic (i.e. "mountain chart") version originally shown. The entire point of a logarithmic chart is so that up-and-down moves can be directly compared over time. Non-logarithmic charts make more recent dips look more terrifying by exaggerating the size of the move compared to earlier sequence points. Logarithmic charts address this, but have their own downside in that short-term dips seem "smoothed out" and less bad then they actually were in the moment.

 

[mshan]

Don't know about you, but I don't count my billions on a logarithmic scale.

(just kidding)

 

[halik]

It's the Y-Axis that's in logarithmic scale in that chart, and it's not sneaky at all. It's an extremely common charting depiction in the financial world, probably moreso than the arithmetic (i.e. "mountain chart") version originally shown.

It's the same data, but both of them are pointless since the base changes continuously (our gdp grew the entire time, so there's a baked in growth factor).

This is the appropriate chart to use in this argument:

 

[Ausm]

In fact, income inequality has gotten so extreme here that the US now ranks 93rd in the world in "income equality." China's ahead of us. So is India. So is Iran:

And then there are taxes... It's a great time to make a boatload of money in America, because taxes on the nation's highest-earners are close to the lowest they've ever been:

http://www.businessinsider.com/what...-chinas-ahead-of-us-so-is-india-so-is-iran-19


There is the element of increased productivity, so profits should be going up higher than wages, but I doubt to this extent, except for 8 years of "government of, for, and by the corporation" (Jim Cramer used to crow this saying over and over again during bubble years) under the previous administration...

Jim Cramer is a Goldman Sax stooge This a prime example of the fall out of the "Trickle on" theory.

 

[Ausm]

The latest CBO Report just released this month.

Disclaimer: I know the Righties will dismiss the CBO's finding when it isn't in their best interest this is evident if you follow Congress.

http://www.cbo.gov/doc.cfm?index=12485

 

[Craig234]

I had a similar thread FYI, IMO this is the most important issue:

http://forums.anandtech.com/showthread.php?t=2193343&highlight=important

 

[Craig234]

Jim Cramer is a Goldman Sax stooge

I wouldn't say that, I don't have any evidence of it. I'd save that for others.

 

[Ausm]

I wouldn't say that, I don't have any evidence of it. I'd save that for others.

http://crooksandliars.com/john-amato/jon-stewart-creams-jim-cramer-daily-sho

http://www.infowars.com/casino-carnival-barker-jim-cramer-defends-goldman-sachs/

http://www.youtube.com/watch?v=6TzSqWWOBaY

 

[HomerJS]

I know it's not going to be well received by many, but this isn't the result of some specific government action or administration. As you can see, the difference between the elite wealthy and the rest spiked during Clinton's term. IMO it has a lot more to do with the fact that because of the increased sophistication and complexity of the financial system, those with great wealth have at their disposal a lot more tools to take advantage of flaws in the system than the average person. They will do better than the average person no matter which party is in power because they simply have the leverage and tools that others don't.

For example, the elite rich and power brokers were able to cash in on the dot com boom of the 90's, with inside tracks on IPO's before the "common" investor, and were then able to assume less risky positions as the dot com bubble burst. End result, they gained tremendously in wealth, while most others first gained some and then lost some.

I'm not a fan of the growing wealth disparity, I think it's a detriment to the country, but I can't think of any feasible mechanism that can be used to help bring things back into balance, short of simply stealing the money of those with wealth, which is unacceptable as well.

Gave this a little thought over the last 24 hrs but want to respond to some replys.

Making money off money was one of my early thoughts. I want to come back to it but there has been an explosion of this since 1980. A lot of "wealth" has been generated by smart math majors pushing money around and not making "stuff" (goods and services). Some government deregulation has allowed this money pushing to become more complicated aka relaxing regulations on derivitives. Done at the end of the Clinton admin.

 

[the DRIZZLE]

Compare long term capital gains rates from over the last 20 years and the effective tax rates for the top 400 filers.

This is how the extremely wealthy get compensated. We're talking 0.1-0.01% here, not the 1% bullshit.

On the topic of the sound bitey 1%

Or direct comparison of the 1% versus the actually-rich

This.

 

[HomerJS]

Come here looking for honest answers? Fat chance. Give it 5 posts and Craig will be here with more pseudointellectual garbage based in conjecture and hyperbole... That's about as close as you'll get.

Why don't you find a breakdown of who is in the '1%', how much money they make, and what they do. Then come back and explain why you think Hess people having more money than most somehow prevents you from accomplishing your aims. Do all this with a shred of intellectual honesty and you'll have more answers than you'll get from 'some people'...

Save234

Haven't seen a breakdown where the 1% are making their money yet. Not arguing person a making 100 million necessarily prevents me from doing anything. If you look at the OP the example I used caused a devaluing of my 401K and my house. I suffer this those CEOs don't suffer consequences. This is a primary beef of OWS

 

[HomerJS]

Outstanding!

All in all, it looks like we, here in the USA, are doing well. Good for us.

Now go back and see if there is any mobility from the bottom into the top.

A lot, not all, of this nation's very wealthy started from very modest means.

I don't care if there is income distribution inequities. Who cares? I for one do not. All I care about is that there is for the most part a level playing field allowing those with the better "mouse trap" to move up. It certainly would appear there are many that are moving on up.

Jobs, Gates, Dell, Buffett..........

If this trend continues we could have 12 people owning holding over 75% of the nations wealth. I can't believe you think this is a good thing. If you do nothing I or anyone else can say.

 

[HomerJS]

Yes, liberals hate "the 1%" for income disparity.

This, the 37,849,373th thread showing off that detail, has really touched me in a way that the previous 37,849,272 threads could not achieve.

Thank you.

Try avoiding talking points. It's a canard liberals hate the rich. In fact the left has admiration for people becoming uber rich from nothing (sweat equity). I don't hear the left dispariging the likes of

The late Steve Jobs
Oprah Winfry
Bill Gates
Mark Cuban

They made at least a billion from the ground up.

 

[HomerJS]

Here's another perspective. Just as important (or even more so) than how "evenly" things are dispersed is how total well-being for all is maximized. In other words, it's not only how one's relative slice of the pie compares to others, but how large the pie is altogether.

I don't know how your comment relates to chart. From what I read the closer to 0 the more income id evenly "distributed". Most of the industrialized countries are in the mid 20s to mod 30s. The US is in the mid 40s.

As to your assertion if the pie grow your smaller piece is bigger. You made that comment in a vaccuum. Yes the "actual size" of your slice is bigger but it's value relative to the size of the entire pie goes down. It overall worth goes down because you 5lb slice can't buy what it used to due to inflation.

 

[HomerJS]

It's not ideology, it's morals. Unless you consider their money yours - and can legally point to that - you have no right to take it from them. Progressive taxation for such a limited, focused group of individuals is no more than organized robbery, especially when - as far as I know - there is no existing mechanism to tax them for their holdings and equity that constitutes the majority of their wealth.

We have inequality because we are, well, unequal. Why is this concept so alien to many?

We never have been totally equal but how did income disparity manifest itself after 1979? I don't buy the top 1% just started working harder or the bottom 99% just got lazy.

 

[Jhhnn]

It's the same data, but both of them are pointless since the base changes continuously (our gdp grew the entire time, so there's a baked in growth factor).

This is the appropriate chart to use in this argument:

And here's after tax wages as a % of GDP-

What we're seeing is a huge shift of income sourcing away from employment to investment.

 

[OneOfTheseDays]

My biggest concern is not the people are getting wealthy, it's that people are getting wealthy offering almost no value whatsoever to society as a whole. The financial industry as a whole needs to be completely reformed. There's just no common sense anymore, and this should be something D's and R's are in whole-hearted agreement with.

 

[Infohawk]

Both parties seem to want the US to become a third world country (in many ways it seems like it already is these days). Income disparity is definitely a Republican contribution. As woolfe alluded to, there are no real Republican solutions to this issue because many don't even seem to think it's an issue.

 

[Ausm]

Both parties seem to want the US to become a third world country (in many ways it seems like it already is these days). Income disparity is definitely a Republican contribution. As woolfe alluded to, there are no real Republican solutions to this issue because many don't even seem to think it's an issue.

That's because they are catering to their Sugar Daddies

 

[Anarchist420]

I agree with the OP. I shall add that the Occupy Wall Street was started by the Dems to get support for more corporatist policies under the guise of progressivism.

I do think that income inequalities are partially due to people being unequal, but not more than 3/5 of income inequality is because of that. Who created the dotcom bubble? The Federal Government. Who gives subsidies and regulations to corporations without making every individual better? The Federal Government.

The truth is that Clinton NEVER fucking deregulated. He regulated us more than we already were. Once people understand that neoliberalism is mercantlilism, the better off we'll all be. After that, they'll need to realize that they don't have the right to things they don't naturally own, but that will be a lot easier once the government stops barriers to entry for the "99&#37;".