Why President Obama Is Wrong on Inequality

It is not the "defining challenge of our time."

Obama at CAPWhite HouseAre the rich getting richer? Yes. Are the poor getting poorer? No. In fact, over the past 35 years most Americans got richer. Has income inequality increased in the United States? Yes. Does it matter? Well, President Barack Obama thinks so. In a December speech at the Center for American Progress, the president declared that "a dangerous and growing inequality and lack of upward mobility" is "the defining challenge of our time." Is that so? No.

Last month the Congressional Budget Office (CBO) issued a study looking at the evolution of the tax burdens borne by Americans at all income levels. Among other things, the CBO looked at after-tax income trends for each quintile of American households since 1979, including not just wages but also benefits and transfer payments. Using the CBO data, the Brookings economist Gary Burtless has shown that from 1979 and 2010, the last year for which data are available, the bottom fifth's after-tax income in constant dollars rose by 49 percent. The incomes of households in the second lowest, middle, and fourth quintiles increased by 37 percent, 36 percent, and 45 percent, respectively. The poor and the middle class got richer.

Burtless then divides the households situated in the top fifth of incomes into four groups: those in 90th percentile and below, those in the 91st through 95th percentiles, those in the 96th through 99th percentiles, and the top 1 percent. From 1979 to 2010, incomes for those fortunate households increased by 54 percent, 67 percent, 79 percent, and 202 percent, respectively. The rich got richer too, and they got richer faster.

Because of these differential increases in income, the share of pre-tax national income going to the top quintile has increased from 43 percent in 1979 to just over 50 percent in 2010. The share of income accruing to the top 1 percent increased from 9 to 15 percent.

So inequality in the U.S. has increased. But if most Americans' incomes are rising, does it matter if some are getting a larger share?

Inequality is often expressed in the Gini coefficient, a number that ranges between zero (indicating complete equality) and one (indicating that all income goes to one person). The higher the number, the more concentrated the country's income. If the rich get richer and the poor get poorer, the Gini coefficient goes up. If everyone gets richer but the rich get more, the Gini coefficient still goes up. "The common procedure of regarding a higher Gini coefficient as a deterioration of the national condition is equivalent to treating the marginal social utility of high incomes as negative, i.e., that something bad has occurred when the well-to-do become better off," the Harvard economist Martin Feldstein noted in 1999. A more sensible approach would be to look at the prevalence of poverty, not inequality.

Those worried about rising income inequality also often make the mistake of assuming that each income quintile contains the same households. This also distorts the picture. Between 2009 and 2011, for example, 31.6 percent of Americans fell below the official poverty threshold for at least two months, but only 3.5 percent stayed below it over the entire period.

In his December speech, the president suggested that rising inequality limits income mobility, leaving poor Americans increasingly stuck and struggling on the lower income rungs. The data do not support this claim. In 2009, two economists from the Office of Tax Analysis in the U.S. Treasury compared income mobility in two periods, 1987 to 1996 and 1996 to 2005. The results, published in the National Tax Journal, revealed that "over half of taxpayers moved to a different income quintile and that roughly half of taxpayers who began in the bottom income quintile moved up to a higher income group by the end of each period."

On other hand, the researchers found that the incomes of taxpayers in the top 1 percent of the income distribution in 1996 were more likely to drop to a lower income group by 2005, although only 12 percent of those households fell out of the top quintile. Nevertheless, more than half of the households in the top 1 percent in 2005 were not there in 1996. The researchers concluded that 57.5 percent of individuals changed income quintiles between 1996 and 2005, compared to 58.3 percent between 1987 and 1996. In other words, they found no big change in Americans' income mobility.

The U.S. Treasury researchers updated their analysis of income mobility trends in a May 2013 study for the American Economic Review. Their new study reports that about 75 percent of taxpayers between 35 and 40 years of age in the second, middle and fourth income quintiles in 1987 had moved to in a different quintile by 2007. For example, 24 percent of those who had been in the middle quintile in 1987 were still there in 2007, but 23 percent had moved up a quintile and 18 percent had moved down one. On the other hand, 42 percent of those who had started out in the bottom quintile remained there 20 years later, while 46 percent in top quintile remained on top of the heap. For that cohort, it was harder to rise from the bottom or fall from the top.

But how did the children of households in the bottom and top quintiles of that cohort fare? The researchers report that 27 percent of the people whose parents were in the bottom quintile in 1987 were still there in 2007, while 10 percent had made it into the top quintile. On the other hand, 39 percent of the kids whose parents were in top quintile in 1987 were still there in 2007; 9 percent had fallen to the bottom quintile. In other words, the kids, especially those whose parents were in the bottom fifth, were more liable to change quintiles than their parents. "We leave it to the reader to look at the results and decide whether they think the observed mobility and turnover at the top are sufficient and good," the Treasury researchers laconically conclude.

The real defining economic challenge of our time isn't inequality. It's the persistent joblessness that has followed in the wake of meager economic growth.

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  • rts||

    The real defining economic challenge of our time isn't inequality. It's the persistent joblessnessmeddling of TOP MEN that has followed in the wake of meager economic growth.

  • Loki||

    It's the persistent joblessnessmeddling of TOP MEN that has followed in the wake of caused meager economic growth.

    Fixed it a little more...

  • Pro Libertate||

    If the U.S. were to go into superhyperoverdrive with the economy--let's say because we killed Leviathan and went to a market-based economy--then we'd all get richer, but some of us would get rich faster, and a small number of us would get insanely rich faster. So what? Aren't we glad that such opportunities arise? Beats hoping for a better spot in the breadline.

  • Caleb Turberville||

    You're preaching to people who believe that the economy is a zero sum game.

  • Hugh Akston||

    You just don't get it ProLib. There is no justice so long as someone, somewhere, has one dollar more than I do.

  • Pro Libertate||

    People can say this in a country where people in the ghetto own big screen TVs and smartphones? And those are just the ones not on massive public assistance.

  • UnCivilServant||

    Dammit, people in Ghettoes are living better than I am!

  • ||

    "The less fortunate get all the breaks!"

  • Tim||

    Bread and Circuses, the Romans perfected this 2200 years ago.

  • Pro Libertate||

    For the people on the dole, yes, but this relative improvement in overall wealth is there for people not on the dole. Granted, the number of people on federal assistance is skyrocketing, but even without it, our poor are light years past what used to be poor. Why is that, exactly?

  • sarcasmic||

    Why is that, exactly?

    Quite simply because stuff is cheaper.

  • Rhino||

    are you agreeing with paul krugman that there is no inflation?

  • sarcasmic||

    For example the 32" flatscreen tv that I got a great deal on several years ago could be replaced with a higher quality model at about one sixth of the price. So when people complain about income stagnation they ignore the fact that that stagnant income can buy more stuff than it could in the past.

    People don't understand the difference between money and wealth.

  • Aresen||

    Yeah, and if it wasn't for Netflix, the FCC (or the CRTC in Canada) would still have us watching the same shitty channels.

  • Zeb||

    It's an amazing world if you love consumer electronics. Unfortunately, most of the things I want to buy aren't the sorts of things that go down in price like that. I like good food and drink, lumber and power tools.

  • sarcasmic||

    Every time I buy power tools they're cheaper than the last time I went out.

  • Zeb||

    Depends on what you are looking for. Bigger, less mass market things don't seem to be doing that.

    But in general what you say is true. I don't really have a point other than that I am annoyingly broke at the moment.

  • sarcasmic||

    I don't really have a point other than that I am annoyingly broke at the moment.

    I just got paid today. After the new health insurance kicked in, by biweekly paycheck is fifty dollars smaller than it used to be. And the company is still in a three year long pay freeze with no end in sight.

  • Zeb||

    I can definitely sympathize.

  • sarcasmic||

    And they just required that we fill out self-assessments for evaluations that will not be connected to any increase in pay. Retarded.

  • paranoid android||

    I cannot for the life of me understand what the point of self-assessments is supposed to be. Who cares how awesome I think I am? Isn't the entire point of having managers to evaluate who's most effective at doing their job?

  • ||

    "Isn't the entire point of having managers to evaluate who's most effective at doing their job?"

    Yes, but from a manager's perspective, the entire point of having you is to be their underling that does all their work for them.

  • Loki||

    Isn't the entire point of having managers to evaluate who's most effective at doing their job?

    Yes, but that would require managers to do their fucking jobs themselves. Half the allure of management is being paid more money to screw off and occasionally produce a powerpoint presentation full of the latest and greatest buzzwords that don't mean anything. It's nice work, if you can get it.

  • Pro Libertate||

    To be fair, it's usually not the managers. It's HR.

  • Loki||

    You could pretty much replace "managers" with "HR" and it would still be just as true.

  • Zeb||

    Depends on the company structure. I'm a manager, of a small crew in one capacity and of mostly just myself in another. Which means I have to actually work sometimes.

  • Rhino||

    as a manager myself, i take offense to that. i screw off a lot less than the people who report to me. i'm also the one who has to fight 50 union workers every time corporate wants to implement a new policy like warm up stretches.

  • Spoonman.||

    At my employer, your connection to your supervisor is often nebulous, so the self-assessment allows you to point out things you've done that your supervisor has never heard of.

  • Zeb||

    At least my company has had the decency to wait until there is some chance of pay increases to do evaluations.

  • Rhino||

    i negotiated for more money when i took my job. the GM said after 6 months, we'd do a performance review and talk about a the higher salary then. 6 months. no performance review. 12 months. no performance review. 18 months. no performance review. i been had

  • OneOut||

    Sarcasmic

    I have had only a 2 year exposure to the corporate employee environment in 30 years of work.

    My heart goes out to you.

    Tell'em how fucking good you are !

  • BigT||

    But they well could be connected to a RIF.

  • OneOut||

    Fity bucks ? That ain't bad.

    Consider yourself fortunate.

  • OneOut||

    "Depends on what you are looking for. Bigger, less mass market things don't seem to be doing that."

    That's normal. Economies of scale and all that.

  • OneOut||

    Yes and increasingly so, the only ones who will be able to afford even those cheap TVs will be those who build them, and that's not the workers of the US of A.

  • R C Dean||

    our poor are light years past what used to be poor. Why is that, exactly?

    Aside from the overall increase in wealth in the country as a whole,

    Its because we converted the definition of "poor" from "struggling to provide food and shelter" to "the bottom quintile".

    With that definition, yes, the poor will always be with us.

  • Pro Libertate||

    So, like on Star Trek, the poor are the red shirts.

  • sasob||

    Hugh Akston|1.10.14 @ 1:46PM|#

    You just don't get it ProLib. There is no justice so long as someone, somewhere, has one dollar more than I do.

    No, Hugh. There's no justice so long as someone has a dollar more than others think he needs. :-)

  • Aresen||

    Given the choice between a stagnant economy where everybody earned $x and a growing economy where the poorest earned $5x and the richest earned $1000x, the social justice types would unhesitatingly choose the former.

  • sarcasmic||

    It's ironic how they describe capitalism as a "race to the bottom," when the equality they want requires reducing everyone to the lowest common denominator.

  • Aresen||

    I don't think it is ironic at all.

    It is easier to control people who are poor.

    Rich people have more choices.

    Social justice is about control, not about fairness.

  • Tim||

    Things elites like about poor people:

    1. Poor people sell their votes.
    2. Poor people are gullible.
    3. Poor people aren't interested in history, math or the constitution.
    4. Poor people can't vote with their feet.
    5. Poor people are interested in porn, fatty foods drugs and booze.
    6. Poor people can be killed with impunity (Balko's Law).

    Any others?

  • Enough About Palin||

    justice is just the long spelling of ism

    social justice = socialism

  • blist14ant||

    neoconservatives are the enemies of libertarianism we need to stop them
    http://www.youtube.com/watch?v=6FRyLustR1Y

  • Tony||

    How nice it must be to be so certain of things that you can't possibly know.

  • some guy||

    Come on, Tony. You aren't even trying today. Are you finally bored of us?

  • sarcasmic||

    You would know.

  • OneOut||

    Tell us how it is.

  • Rhino||

    i would argue that, while inequality would certainly be a characteristic of a free society, the current amount of inequality is far greater than would otherwise be experienced, if not for the central banking system and government collusion in the economy.

  • joliyana||

    Start working at home with GOOGLE!YAHOO. ABCNEWS AND MORE GLOBAL SITES... It’s by-far the best job I’ve had. Last Wednesday I got a brand new BMW since getting a check for $6474 this - 4 weeks past. I began this 8-months ago and immediately was bringing home at least $77 per hour.for a work detail go to home tab.... I work through this link,

    http://WWW.CASH46.COM

  • Tommy_Grand||

    This is a good article, albeit less incisive than the (cited) 1999 Feldstein article.

  • sarcasmic||

    Those stupid facts will never get in the way of the narrative!

  • Tim||

    "Income Inequality" is the Soup Du Jour, just as the "War on Women" was for 2014. His fucking political team is picking a theme for each year of his presidency. Can't wait for 2015's "Age of Ultron".

  • ||

    No, you idiot, in 2015 it'll be time to start complaining about hoverboard inequality.

  • Tim||

    1.21 GIGAWATTS!

  • BiMonSciFiCon||

    Anyone notice how Michael J. Fox is pronouncing "gigawatt" differently in those new commercials? "gig-a-watt" instead of "jig-a-watt".

    This bothers me for some reason.

  • Pro Libertate||

    Canadian.

  • Fluffy||

    That's how I pronounce it.

  • Zeb||

    I've never heard anyone besides Doc Brown pronounce it "jigawatt".

  • Pro Libertate||

    Me, too. I meant him randomly pronouncing words--that's Canadian. Listen to Dan Aykroyd sometime.

  • creech||

    "jig-a-watt".

    This is racist, no?

  • Loki||

    Only if someone answers "Jig-a-boo."

  • BiMonSciFiCon||

    What do we want?

    Mr. Fusions!

    When do we want them?

    Now!

  • Brett L||

    I mean, I guess the when doesn't really matter so much.

  • BiMonSciFiCon||

    Ha, good point. Provided we all get flux capacitors.

  • Zeb||

    I think you have your years confused.

  • Sevo||

    Every lefty econ writer in the world is pissed that the poor aren't getting richer quick enough and is willing to make everyone poor to solve the problem.

  • wareagle||

    he's wrong because it's not a govt "challenge" at any time. Goddamn these proggies and their unspoken notion of equality of result. It cannot happen. Period. Someone, somewhere, even the most utopian society imaginable, is going to have more than someone else. The Dems are truly are bankrupt of ideas. Not that the Repubs are much better but they aren't quite as eager to display their vapidness.

  • Sevo||

    "The Dems are truly are bankrupt of ideas."

    Nope. They've got one that just keeps on working:
    FREE SHIT!

  • Pro Libertate||

    What we need are brigades of Equalizers. Like repo men, but they take anything above the allotted wealth and property.

  • The Last American Hero||

    Sounds like a job for Robert Macall.

  • Certified Public Asskicker||

    Rawstory readers freak out over John Stossel's views on the War on Poverty!

    http://www.rawstory.com/rs/201.....n-stossel/

  • Certified Public Asskicker||

    I am having trouble finding the most ridiculous comment.

  • Brett L||

    Please find the one that implies women are too emotional to obey rational economic incentives. I like those for the irony.

  • Certified Public Asskicker||

    This doesn't fit what you're looking for, but it is funny at least:

    Actually, women like me decided we didn't want men in the home because most men, including my son's father, are pretty pathetic. They're often abusive, useless, and resent it when you make more money than them or, heaven forbid, are smarter than they are. I've kicked a number of them out of my life because they don't like pets.

    And then, there are the jerks running around like Stossel, of which there is an abundance here in Virginia.......

    Find me a modern day Cary Grant and we'll talk.

  • wareagle||

    I'm pretty sure Cary Grant, modern or otherwise, would have little use for this sort of shrew.

    Hint: when you admit to kicking out a number of men and pretty much think the whole gender is useless, the problem might be you.

  • JW||

    I recall Cary Grant getting in trouble due a bit of Connery backhand action with the ladies.

  • OneOut||

    "Hint: when you admit to kicking out a number of men and pretty much think the whole gender is useless, the problem might be you."

    I'm thinking the "kicking out" might actually be " he woke up "coyote ugly" and gnawed his arm off to get away".

    She's dreaming of being desirable and able to pick and choose who dirtys her sheets.

  • ||

    Most men? Sounds pretty sexist to me!

    Ain't no way Cary Grant would put up with her shit either.

  • Killaz||

    We Cary Grant types see the chip on their shoulders from a mile off and swerve to miss them.

  • sasob||

    I thought Cary Grant was gay - or bisexual, at least.

  • The Last American Hero||

    So she moved in with a guy knowing he didn't like pets or she moved in with a guy she barely knew only to later discover he didn't like pets? How the hell do you get to that point in the relationship and not have a read on their stance on pets?

  • NoVAHockey||

    she thought she could change him.

  • ||

    I think we have sufficient evidence to assume that she's abjectly terrible in her choices of men. But remember: that's everybody else's fault!

  • Dweebston||

    It's her men with the abjectly terrible taste.

  • sasob||

    Actually, women like me decided we didn't want men in the home because most men, including my son's father, are pretty pathetic.

    I feel sorry for this woman's son ...and daughter, too, if she has one.

  • Loki||

    This bitch just needs to go full bull-dyke and get it over with. I'm just wondering if there are any women who could put up with her for more than 5 minutes.

  • Brett L||

    What's a good slap fight between lesbian lovers? Wednesday according to too many of my gay acquaintances.

  • Anonymous Coward||

    Actually, women like me decided we didn't want men in the home because most men, including my son's father, are pretty pathetic.

    And yet you spread your legs for him, let him get inside of your pussy, with no condom, and put a baby in you.

    What does that say about your ability to judge character?

    If you lay down with men who are "pretty pathetic", what does that say about you?

    They're often abusive, useless, and resent it when you make more money than them or, heaven forbid, are smarter than they are. I've kicked a number of them out of my life because they don't like pets.

    So you like them pathetic, abusive, useless, broke, and stupid and you keep bringing them in and letting them put a dick in you.

    I love it when people try to talk shit about other people and end up burning themselves.

    Find me a modern day Cary Grant and we'll talk.

    One, Cary Grant wouldn't want your silly ass. What is the common denominator in all of your failed relationships?

    YOU.

    And would you even know what to do with a good man if he fell into your lap?

    Probably not.

  • gaijin||

    What is the common denominator in all of your failed relationships failures?

    YOU.

    This should be printed on a billboard.

  • ||

    So she decided she does not want a man in the house yet she has kicked a number of them out....

    Sounds like she simply does not want the same man in her house for a long period of time.

  • Almanian!||

    Sort if like the search for Peak Derp - just when you think you've found the most-ridiculous comment, ANOTHER ONE APPEARS!

  • Certified Public Asskicker||

    My gift to you:

    Really? Because I'm leaning more toward a rash of sexually repressed,
    overly mustached closeted gay men with chips on their shoulders as being
    a bigger reason for a woman to go single. I guess we all have our own
    opinions.

  • ||

    I don't suppose she realizes that Stossel is a libertarian and has no problem with people being gay.

  • ||

    She realizes poverty = bad, therefore war on poverty = good, opponent of war on poverty = bad. Once you poke a whole in that, all she has left are ad hominems.

  • Almanian!||

    That one does peg the meter....

    *recalibrates....again*

  • Killaz||

    'Chip on their shoulders'? Describes every feminist I have ever met.

  • Brett L||

    He's obviously gay because no man that good looking would sleep with her.

  • BigT||

    'Chip on their shoulders'? Describes every feminist I have ever met.

    Feminism - putting chips on women's shoulders since 1968!!

  • The Last American Hero||

    Funny how the left loves gays but is quick to use homosexuality as a pejorative.

  • ||

    Isn't this the exact equivalent of a loser straight guy saying that all the women who won't go out with him are lesbians? Like, fucking exactly? Oh god that's so rich I might not be able to keep it down.

  • Anonymous Coward||

    One main difference: You're talking about losers weren't actually getting any ass from the women they are badmouthing and never had a chance.

    She's talking about guys who have fucked her, at least one of which has a child with her, then the relationship didn't work out and suddenly, they ain't shit. Four weeks ago, they were the greatest thing since sliced bread; today, they are pathetic, lazy, intimidated by her making more money and being smarter, and hate her pets.

    Some chicks will switch faces on you real fast. You don't break up with them; you escape to freedom.

  • ||

    Well, there's a flip side to this. The guys who end up with women like this in the first place are equally terrible about choosing someone of the opposite sex. In a way, one could say they deserve each other. I have as much scorn for the guy who couldn't see what this woman was like as I do for her. Nobody is innocent.

  • sasob||

    You'd be surprised at how good an actress or actor some people can be. Sometimes it takes a while to find out what someone is really like.

  • OneOut||

    Do you know the difference between a bitch and a whore ?

    A whore will fuck anybody, but a Bitch will fuck anybody BUT you.

  • Smilin' Joe Fission||

    How are you reading those? They are painfully stupid.

    It's emoting all the way down

  • Certified Public Asskicker||

    I find it slightly amusing I suppose.

  • ||

    "I am having trouble finding the most ridiculous comment."

    Have at it. I, for one, chose to preserve my normal blood pressure.

  • Loki||

    I am having trouble finding the most ridiculous comment.

    You realize there are far better and more fun forms of self abuse, right?

  • Tony||

    It's the one by John Stossel.

  • Dweebston||

    It's this one, actually.

  • ||

    Man, you really have given up.

  • wareagle||

    wow, what a peck of stupid. It's like people never bothered to read what Stossel actually said, they just reacted to his saying it.

  • BiMonSciFiCon||

    I assume that's you commenting over there?

  • wareagle||

    I couldn't help myself.

  • BiMonSciFiCon||

    Me neither.

  • Enough About Palin||

    Say hi to Buster.

  • NoVAHockey||

    I've about made my peace with it. fine. if you think another 50 years of LBJ-style Great Society is going to address poverty and that such interventions don't have an influence on how people arrange their lives, whatever.

    i'll be on the beach, earning 20%.

  • Loki||

    if you think another 50 years of LBJ-style Great Society is going to address poverty and that such interventions don't have an influence on how people arrange their lives, whatever.

    As the wise man Ron White once said, "you can't fix stupid."

  • Anonymous Coward||

    Buster
    I see you didn't get the memo that Stossel isn't a Republican. You're as stupid as Reason's pet Tony.

    The dark tide is rising. Soon, Reason will be everywhere and the power of libertarianism will be unstoppable.

  • Almanian!||

    Inequality? I blame the Bushes.

  • Almanian!||

    And by "The Bushes", I mean Kate Bush and the band, "Bush".

  • From the Tundra||

    Dude. Don't blame Kate. Hounds of Love absolves her of any guilt.

  • Almanian!||

    The cover of "The Kick Inside" (my first KB album - maybe her first?)...is still...wonderful.

  • JW||

    It's criminal what time has done to her beauty.

  • Tim||

    What about all that Busch beer you drank in college?

  • The Late P Brooks||

    We are dealing with people incapable of imagining a world in which human interactions are not guided by the government.

    When I see somebody with more and nicer stuff than I have, I don't waste my time wishing somebody from the government would take it away from him and give it to me. I just bash him on the head and take what I want.

    It's really quite simple, and no middleman is involved.

  • Killaz||

    That's why I respect you the most. You're a Judas Priest song come to life.

  • sarcasmic||

  • AlmightyJB||

    Their songs lyrics took on new meaning once we found out Halford was gay. I saw them back in 80 or 81. They kicked ass.

  • sarcasmic||

    A gay friend of mine said that gay people always knew he was gay because the gay outfits he wore were straight out of a gay sex shop.

  • gaijin||

    They kicked ass.

    Yes! Saw them on a three way with Rush and Uriah Heep in 80. Man could halford wail on Exciter.

  • The Last American Hero||

    Pounding the world, like a battering ram...

  • ||

    RAM IT DOWN

  • OneOut||

    Gay

  • Aresen||

    Why President Obama Is Wrong on Inequality

    Bailey, the internet only has room for a few yottabytes, are you sure you want to go there?

  • Enough About Palin||

    Here's where the income inequality lies:

    Congress Is Now Mostly A Millionaires’ Club

    For the first time, more than half of congressional lawmakers are worth at least $1 million

    And of course Obama is a millionaire too.

  • AlmightyJB||

    They're not talking about the chosen Vanguard. People like us can't expect people like them to live as we do.

  • Tony||

    Irony abounds. To you guys wealth is the same as productivity. Yet it's the least productive Congress ever.

  • gaijin||

    Idiocy abounds...to you a productive congress is the same as a productive business.

  • some guy||

    Where have we ever said that wealth is productivity? We frequently admit that many people get wealthy through the abuse of government sanctioned force, rather than productivity.

  • Tony||

    Sounds like they're being good capitalists to me.

  • ||

    I had resolved never to respond to your idiocy again, but....Jesus Tony, are you drunk? Just coming to after indulging in asphyxiation fetish sex?

  • Juice||

    Is that what capitalism means now? I mean we're going to have to come up with a new word to represent the thing that "capitalism" used to mean. You know, like the way "liberal" used to mean "favoring maximum individual liberty in political and social reform" (and still does in the dictionary).

  • Death Rock and Skull||

    Exactly the kind of capitalism that dipshits like you are responsible for.

  • sasob||

    + ∞ raised to the power of ∞ infinite times.

  • Sevo||

    Tony|1.10.14 @ 4:10PM|#
    "Sounds like they're being good capitalists to me."
    Anyone surprised?
    Hey, Tony, tell us again about the time your drunk frat bud told you about the half chapter he read in Atlas Shrugged!

  • R C Dean||

    I know the compentition's tough, but this may be the stupidest Tony comment ever.

  • KDN||

    I like how he channels Shrike in his response. The singularity approaches.

  • Gilbert Martin||

    Wait a while.

    I doubt that it'll take him long to top it.

  • Loki||

    B-B-But... IT'S NOT FAAAAAIIIIIIIRRRRRRR!!!!!11!!!! WAAAAAAAAHHHHHH!!!!!!!!

  • gaijin||

    How come you have that and I don't? Give me one good reason you should have that and I shouldn't? One GOOD reason.

  • Loki||

    Because I rule and you're a a pathetic loser? jk, sorta

  • gaijin||

    Victim Response:

    oh yeah, well if you had to [insert excuse verb] [insert excuse noun] like I did, we'll see where you'd be!

    Alternative, shorter derp response:

    Priviledge!

  • OneOut||

    Please be more specific.

    White Privilege?

    Thin Privilege ?

  • Gilbert Martin||

    "Correspondent Ronald Bailey analyzes the data on income inequality and mobility and finds that the president doesn't know what he's talking about"

    If there's ANY subject on which Obama has run his mouth that he DOES know what he's talking about, I haven't seen it.

  • Loki||

    "Correspondent Ronald Bailey analyzes the data on income inequality and mobility and finds that the president doesn't know what he's talking about"

    Yeah, they could pretty much just re-use that for any and everything Choco-Nixon dreamboat opens his stupid mouth about.

  • The Late P Brooks||

    Irony abounds. To you guys wealth is the same as productivity. Yet it's the least productive Congress ever.

    Thank you, Captain Word Salad. That's like the worst limerick ever.

  • Jason Lore||

    Is this taking inflation into account? It seems a bit mathematically implausible to purport that everybody is getting wealthier and nobody is getting poorer.

  • NotAnotherSkippy||

    Exactly who became poorer when agriculture was invented? It's called productivity and it makes us all richer.

  • BigT||

    It seems a bit mathematically implausible to purport that everybody is getting wealthier and nobody is getting poorer.

    As long as the pie is getting larger, it is quite possible (likely, even) that everyone is getting wealthier.

    Income inequality:
    If you make $40k and I make $60k and we each double our incomes, then the inequality has grown from $20k to $40k. But you are a lot better off.

    Poor math skills are the Left's best friend. STEM education moves people to be more economically conservative.

  • ||

    Never mistake activity for achievement.

    -John Wooden

  • Response||

    After income inequality will come happiness inequality. People will complain that it's not fair that they have to work a cash register, pickup garbage, hammer nails, etc, when another person is doing what they wish they could do. Life is not fair - someone is always going to have something you want.

  • OneOut||

    I want to play in the NFL.

    Can you help me ?

  • Response||

    Yes, though it does require experimental surgery to replace your brain with a professional athlete's brain. It's probably covered by Obamacare.

  • RishJoMo||

    Its all good when you think about it like that.

    www.AnonGlobal.tk

  • blueberrynugs||

    This is one of the more intellectually lazy pieces I've read in a long time. Seriously. Income going up 50% NOMINALLY over 35 years isn't a whole lot when you consider that inflation was more than 3% a year for each of those 35 years.

    The gap between the amount that it takes to survive and the amount actually earned has grown larger, mostly due to the federal reserve the inherent debt properties of our currency translating into reported and unreported inflation.

  • NotAnotherSkippy||

    the last year for which data are available, the bottom fifth's after-tax income in constant dollars rose by 49 percent.

    Dumbass.

  • BigT||

    Poor math skills are the Left's best friend. Poor reading comprehension is a close second.

  • A nation of boiled frogs||

    Bailey has convinced me. I think the poor should take to the streets and demand that Washington finally start paying attention to the interests of rich people.

    Poor people can't be counted on to help in that fight for justice though - because they're selfish.

  • RBourne||

    One thing that I have only learned in the last few years is that a huge number of people (a majority?) genuinley feel pain from the knowledge that other people have something that they do not. They really would be happier with a standard of living x and be average than have a standard of living of 5x while the average was 25x. A huge number of people, including most libertarians, would prefer the 5x with a 25x average. This latter preference is more in line with the rationalistic temperament (NT on Briggs Meyers) that is prevalent among libertarians, not to mention introversion.

    With most people the psychology is more complicated with some values (e.g., health) being more important in the absolute and others (e.g., clothing beyond keeping warm) valued more comparatively.

    None of this negates the libertarian moral case against using force (or the Objectivist moral case against even using social pressure) to stifle the most productive (or lucky) or to use the productive (or lucky) as a resource to provide economic value for others. It does, however, mean that libertarians need to use some care when adding utilitarian arguments.

  • RBourne||

    Another thought on this:

    Many on the left seem to be equally ignorant that many, including many poor people, to not place much value on equality rather than absolute economic benefits. It may be best to admit that inequality per se does cause emotional pain among many who are below average, or even above average but below others, but that this is an emotion that is best suppressed, just as many on the left admit that the desire for revenge is genuine and common emotion, but should be suppressed and discouraged for moral reasons.

  • Duelles||

    For every perceived inequality of our great American lives, the government forces see level the top down which nothing more than an opportunity cost on our nation. Idiocy at best. Putzishness at its worst.
    Now? How do I avoid government interference? By accumulating as much wealth as possible. Good luck, all.

  • MichalaMatanzagyn||

    my co-worker's aunt makes 67 dollars/hr on the internet. She has been out of a job for 9 months but last month her pay check was 18639 dollars just working on the internet for a few hours. browse this site

    ➨➨➨➨➨➨➨➨ http://www.tec30.com

  • Freddie||

    We who support free markets and limited government need a better message on inequality. A wonky statistical analysis won't do; neither will finger wagging over "envy" and "class warfare".

    In general stop defending a status quo that is not ours to defend.
    Expensive, intrusive government hits especially hard at manufacturing, traditionally the ticket to the middle class for "regular folk" who are not highly educated professionals.Big government = more inequality!

    Point out that millions of poor and minority kids are trapped in dysfunctional big city schools, run by liberal Democrats who answer to teachers unions instead of parents and oppose school choice.

    Finally, we have to acknowledge that not all wealth is earned. We must defend the rewards of the guy who built the proverbial better mousetrap, but what about someone who cashed in on a real estate market that was artificially pumped up by Freddie and Fannie. Again, Big Government = more inequality!

  • Brucehy||


    my best friend's half-sister makes $71/hour on the internet. She has been fired for nine months but last month her paycheck was $13504 just working on the internet for a few hours. check

    ======== WWW.CASH46.COM

  • ibcbet||

    Unfortunately, most of the things I want to buy aren't the sorts of things that go down in price like that.

  • judeoconnor@mac.com||

    I've never worked for a poor man and got paid, inequality exists only in the minds of people to lazy to better themselves or there are times when people are not able to comprehend the job they are asked to do. We are not all wired the same, that's why there is such a thing as the butcher, the baker and the candle stick maker.

  • american socialist||

    or we could just raise rich people's taxes to address income inequality. But no... people that do things like drive the home mortgage market into the ditch or commit securities fraud to get rich are much to valuable to the u.s. economy.

    how come every time i do even the most cursory google search on Reason's economically "libertarian"writers i find out that they either have the most retrograde opinions on personal liberty or supported the most egregious projections of american power when republicans were in office. does ronald bailey still think the war in iraq was a good idea. i bet he's pretty much a whiny bitch about drones now that a democrat is in office

  • Clegg||

    In 1976, the 99% owned 80% of U.S. wealth. After we abandoned pure progressive fiscal policy, the 99% lost 20% of their wealth. Today, the 99% possess just 64% of U.S. wealth. Where did all that wealth go? It trickled UP into the pockets of the 1% (mostly the 0.1% and higher). The 99% have had their common wealth sucked out by the 1%-class at a rate of around 0.5% per year, for the last 35 years. At this rate, by 2030, the 1%-class will possess 40% of U.S. wealth. The last time we saw this degree of extreme wealth inequality was in 1929, just before the Great Depression, when the 1% assumed 43% ownership of this country.

    You can't run a healthy country without a healthy middle-class. We must return to an equitable 1% / 99% wealth ratio, which is hard to identify, but certainly less than 30%, and probably closer to 20%. Take too much wealth out of the hands of the 1% and you impact new-business creation. Allow too much wealth to flow into the 1% (as supply side policy has done for the last 30 years), and you undermine the socio-economic foundations of the country, which is the middle class.

    Regardless of what you think of Piketty's ideas, his book is a wealth of raw data that is not refutable. Read it, and argue from facts, not fictions.

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