Fall Out of the Income Gap

As Income Gap Widens, Uncertainty Spreads
More U.S. Families Struggle to Stay on Track

That's the ominous headline of a front page Washington Post story today. It includes a couple of truly hard-luck stories--of workers who have been displaced and who are now struggling to make ends meet. But the large point of the piece--as summarized by the headline--is bullshit.

Check out the chart accompanying the story carefully and you'll note that 22.3 percent of households were in the middle income quintile as of 1967--a figure that shrunk to 15 percent in 2003 (all corresponding money amounts are in constant 2003 dollars); that's supposed to be bad news.

Note also that in 1967 52.8 percent of households were in the bottom two income quintiles--a figure that had dropped to 40.9 percent in 2003; that should be very good news.

And note further that the percentage of households in the top two quintiles had risen from 24.9 percent in '67 to 44.1 percent in 2003. That is, arguably, better news still.

So significantly more households were in the top two quintiles in 2003 than in 1967--and significantly fewer were in the bottom two. That this gets spun as bad news is pretty amazing--especially in an economy with relatively low unemployment and historically high home ownership rates and near-record levels of high school seniors going on to college.

Some commenters at Arnold Kling's invaluable economics blog point out that you should properly account for household size, female participation in the workforce, etc. You can also make the case that it's really godawful that the top 5 percent of households (or whatever) are getting all the gains (not true, but you can argue it if you want). That's all fine and dandy.

But so is the simple fact that in the middle of a story about how tough things are for the (statistically) middle class, the main data suggest a very different development: There's fewer people in the middle class because they've bumped up to the next two levels.

A far more interesting--and relevant--story could have been around built Scott Clark, the 51-year-old former factory worker who opens and closes the story. Clark is now driving a mail delivery van at a fraction of his former salary, putting finanical strain on his family. It would be interesting to know what sorts of retraining programs--whether funded by the state or the private sector--actually help people in such situations. But that sort of story never seems to be worth writing at all, much less getting front page ink.

Update: The purpose/gender of the delivery van has been corrected from "male" to "mail."

Comments

[Matthew Yglesias]

The really shocking news in all this to me is the fact that the five "quintiles," despite the name, are not equal in size and do not each contain one fifth of the population.

[Bill]

Some people are so incredibly stupid it's sad.

[Matthew Yglesias]

Now that I've looked over the chart, I actually think the data's being misinterpreted in a different way. The paradoxical result that fewer than one fifth of the households are in the bottom quintile is explained by the fact that the quintiles are divided up according to individuals not households. So fewer households are in the worst quintile as in the best, but the exact same number of people. In other words, the bottom quintile is composed of families with a high number of children-per-earner whereas the top quintile has relatively more children-per-earner. The country as a whole is richer, and most households are rich, but we have more poor kids than we used to.

[R C Dean]

Assuming Matthew is right, the whole story is based on pretty much of a non sequitur. Since large families have to spread the same earning power over more people, it should be no surprise that large households disporportionately populate the bottom end of a per capita earnings chart.

The country as a whole is richer, and most households are rich, but we have more poor kids than we used to.

I disagree. What passes for a "poor" kid these days would have been a solidly middle class kid 30 years ago (with some exceptions of course).

[amr]

Naw, they are not quintiles, they're just arbitrary lines drawn in constant dollars. What the author (or whoever) thought were good lines to draw around the median (above which is one-half the individuals/households/whatever, and below which is one-half).

The pie chart on the bottom shows quintiles.

[Bill]

Dead on, Dean. Those that were middle class in the 1970s would be considered poor today. Unfortunately, your reasoning gains no traction with Democrats and other statists. To them, poverty is ever relative. This, by the way, makes sense for them. If poverty ever disappeared, their reason for (political) existence would be gone.

[neweconomy]

Perhaps he should try driving a female delivery van?

[Sarnath]

Perhaps he should try driving a female delivery van?

Ha ha ha, good catch.

[Gadfly]

Anecdotally and surely unscientifically I rely on my situation and that of other boomers I know. We climbed the ladder for 30 years with between 2 amd 4 employers. We are educated, computer literate, good managers and until the bust of 2000, earned close to six figures. We are now on our own doing the same work we used to do for less than half the money and no benefits. We long ago gave up getting a "regular" job when countless interviews revealed someone about our children's age across the desk looking for someone they could "relate" to. But maybe we could do some consultant work for them since they're trying to hold down their staffing costs.

We value the freedom we now have but have no hope of ever retiring as our parents did and really hope we don't get sick.

[Rachel Balsham]

Tell him Smith College puts in an order for male delivery.

[hey]

k that's ridiculously complex and those quintiles are no quintiles...

but more people are richer households (good news for everyone but Rawlsians like MY) while the larger number of people in poorer households can likely be attributed to the increase in household formation (people move out sooner and are single longer, so more time spent in caerr founding households and less time in larger, older, more prosperous households)

look at any university, and you'll see lots of new "households" (depending on definitions) on very little income. but as MY will vouch for, substantial percentages of young people living alone on low incomes have rather large resources (and not just at his alma mater). You also see this in cities, where the kids move out as soon as they're working, rather than staying at home, but still having access to some serious support.

it is quite easy to move from a top quintiles (or percentile) housheold to the bottom quintile and then to the middle in the span of 5 years... depending on location its even rather easy to hit the top quintile within 6 years (once you get your first bonus or raise out of college)

but people doing beter is always evil to MY...

[Trey]

Won't the spread between rich and poor grow as a consequence of the nation getting richer? I mean, zero income will always be zero, but the top should keep getting higher and higher.

[steve]

I am so, so glad that Matthew started the comments as he did; I was wondering the same thing and feeling as if I just didn't get it, especially given that Nick had spent so much time explaining the chart.

[Evan McElravy]

Dead on, Dean. Those that were middle class in the 1970s would be considered poor today. Unfortunately, your reasoning gains no traction with Democrats and other statists. To them, poverty is ever relative. This, by the way, makes sense for them. If poverty ever disappeared, their reason for (political) existence would be gone.

No, not dead on. First, although I quite agree that it shouldn't matter that some people are getting richer than others, even if everyone is getting richer, it should be plainly obvious to most people who pay attention that this is generally socially corrosive, and you won't like the effects down the line, even if you're making out like a bandit now. And no, I'm not advocating some government programme to redistribute your money for the general welfare, but it would be nice if the anti-egalitarians could admit that massive disparities in wealth tend to have politically destabilizing effects over time and start thinking about non-coercive ways of reconciling that situation. Or else, in the end, you are going to be expropriated by the state.

Second, I'm a long way from believing that everyone is actually getting richer. Manifestly this is not true for my part of the country, the rust belt generaically, and you'll pardon me but I don't give a fuck about the rest of you all. "Sure, just move somewhere else" is of course the libertarian answer but that overlooks some social realities too. For the most part, I would say the ongoing immiseration of my region is a result of government idiocy on various levels, but that's not the whole story either. What's my point? I don't know except I think everyone here's talking a lot of bullshit, so I might as well give you mine, too.

Anyway, statistics lie, trust the eye.

[Michael Moore]

Look, I was born in Flint Michigan. And another thing...

While the income of people making no money has remained steady, the income of CEOs has gone up. Where's the fairness in that?

[Bill]

Yeah right, Evan. I grew up dirt poor in a welfare community--disabled mother, absent alcoholic father, and a 99% child poverty rate at my former elementary school. I studied hard and worked hard, and I still study hard and work hard. Yeah, I had to sacrifice some TV-viewing and partying, but now I work for myself and win the contracts that my former employer loses. Why? Because I learned things without being taught and I made the extra effort while my fellow employees were doing everything in their power to avoid work. I have yet to meet a single person that worked and studied hard, yet remained poor. I have never met a poor, non-student adult that was not lazy, at least mentally. Maybe people in the rust belt should get off their couch-potato-can't-miss-the-football-game-won't-ever-read-a-book asses and do something with their lives. I'm so sick of whiny lazy asses.

[Bill]

Oh, I forgot to mention disabled people. Some of them try very hard, yet can't succeed due to their unfortunate circumstances. I feel for these folks and want to help them. On the other hand, I've known people with crippling depression and folks bound to wheelchairs who manage to succeed. How can anybody look at a person in a wheelchair that earns six figures and not realize that success and failure is almost entirely up to the individual. Stop crying in your beer. Actually, stop drinking beer, you lazy fat slobs.

[Evan McElravy]

Thank you, Bill, for illustrating why I hate people.

[Ray D.]

Evan's earlier statement that "statistics lie, trust the eye" struck a chord with me because I remember the 1960's very well.

When I compare the 1960's to today, there's no contest. We're definitely better off today than most of our parents and the biggest challenge for most of our poor people today is obesity, not starvation.

The biggest difference between the 1960's and today is education and job security. In the "good old days" you could graduate from high school, land a union-protected job and work at the same job until you retire. Today, new technology requires a more educated work force and fewer jobs have a built-in retirement. It is not uncommon for middle-aged workers to return to school for more education and training. Those not willing to adapt end up on the losing end and those are the people who reporters always interview.

For every person out there who has taken a pay cut in the past ten years, there are 2-3 more who changed careers and are making more than they ever dreamed. At some point, the blacksmiths and livery stables went away and were replaced with gas stations and roadside diners. Which would you prefer?

[Dan]

even if everyone is getting richer, it should be plainly obvious to most people who pay attention that this is generally socially corrosive

How is it "generally socially corrosive"? People care about how they are doing on an absolute scale, and relative to their peers. They do not care that Bill Gates has a snazillion dollars more than they do.

and you won't like the effects down the line, even if you're making out like a bandit now.

Don't be coy; what are these supposed "effects down the line"?

"Sure, just move somewhere else" is of course the libertarian answer

No, it's the American answer. Its the reason why the overwhelming majority of Americans are living here, and not in Europe, Asia, or Africa. If the area you are in offers no opportunities, but other places do, you either (a) stay poor and whine about it or (b) move.

[Bill]

You're welcome, Evan. I seem to hate people quite a bit today. Maybe tomorrow I'll give a fuck... maybe not...

If people, i.e., the government, would leave me alone, I wouldn't hate them at all.

[Dan]

In the "good old days" you could graduate from high school, land a union-protected job and work at the same job until you retire.

If you were a relative or friend of a union member, and/or were willing to pay bribes to union officials. Normal, unconnected people had about as much chance of "graduating from high school and landing a union-protected job" as they had of getting into the 1970 Texas National Guard.

[mac]

OK, the question is: do you believe that the numbers are in truly constant dollars?

The numbers at the bottom show that the middle (1/2 median to 2*median) really have shrunk since '69, with the two ends increasing. These numbers are not scaled into 2003 dollars, so they show "scale-free" numbers, and are perhaps more reliable than the absolute scale numbers.

This genuinely demonstrates the liberal hypothesis that the extremes are growing at the expense of the middle -- the "Two Americas" hypothesis.

Now, if inflation hasn't been understated for the past 40 years, the data also show that the median absolute income has improved, by about $10,000 dollars. This, if true, is a good thing. There's also strong evidence that the inflation rate has been understated. This would make the observed gains less, compared to the cost.

[Phil]

I have yet to meet a single person that worked and studied hard, yet remained poor.

"Therefore, they do not exist." See if we can spot the logical flaw. Anyone?

[TWC]

Evan's right, lots of people are talking trash on this subject. So, here's mine

It is fairly apparent on a superficial level that almost everyone is better off today than they were thirty (or fifty) years ago.

Consumer goods are cheaper, in real terms and often in actual dollars as well. That means a broader range of people can afford any given item.

Case in point: My first really cool stereo was a Kenwood 4 channel (dating myself again) that cost a grand and the thousand bucks (in 1977 dollars) didn't get me speakers, a reel to reel, or a turntable.

Last time I bought a receiver was a couple of years ago and it was a slick surround sound set up that came with speakers and a 5 spot DVD player all for around $500.00. And it uncorks wine bottles, has a martini function, and helps chicks wiggle out of their underwear.

[Bill]

Hey, Phil, I was just playing Evan's game of anecdote over statistical evidence. By the way, have you ever met someone who worked hard, studied hard, was not disabled, and was poor? Please give details.

[Iguana]

Quintiles are crap. They are meant to confuse rather to enlighten, which is exactly why income is stated that way.

Oh, look at those people on the south end of the scale getting it good and hard from those bastards at the other end. Except the bastards at the other end is the rest of us. You know us, too. We work hard, raise our kids right, pay the mortgage, drive a late model car, but don't consider ourselves anything but solidly in the middle.

[Bill]

If we eliminated taxes (including Social Security and Medicare) on the first $50,000 earned by a family of four, I'm sure poor folks would appreciate it.

[andy]

"Look, I was born in Flint Michigan. And another thing..."

Michael,

Weren't you born in Davison?

It's bad enough for people in Davison, don't try and disgrace the good people of Flint, too.

[Evan McElravy]

My first reply to Bill was tetchy and rather small, but I was in a hurry to get back to the Minnesota-Philly game after half-time, you see, and pop a suds, so you can imagine my state of mine.

I think this sub-Horatio Alger line you're pushing is really rather silly. That ALL people who try hard succeed and that ALL people who fail are lazy is obviously absurd on the face of it, but such assertions are dangerous, too. Do you really think it does classical liberalism any good to have its adherents going about conversing like some ridiculous top-hatted figure from communist agitprop? You sound like some straw-man constructed by an Indiemedia kid.

I don't know anything about what you do or where you're from or how you got there, so I would not presume to get into an argument along any of those lines, and I have no reason to suspect you haven't completely earned whatever it is you've achieved. But that certainly doesn't give you any standing to pour a bucket of shit all over people whose situations you clearly don't entirely understand.

BTW, watching Kerry on Letterman now. It's a sad commentary but Dave's asking him straighter questions than anybody I've see so far. "What exactly is your plan for bringing America and the world together. Sounds kind of implausible, doesn't it?" Pretty sad commentary on the moronic media coverage of this election, I'd say.

[Brian Cook]

"Anecdotally and surely unscientifically I rely on my situation and that of other boomers I know. We climbed the ladder for 30 years with between 2 amd 4 employers. We are educated, computer literate, good managers and until the bust of 2000, earned close to six figures."

Good managers, huh?

Anecdotally: I am 25. I am a software developer for an established company; my manager manages about 60 people. I've never talked to him. The company is doing very well.

I think your skillset is out of date. There's less to manage now. The company I work for keeps moving management functions into software. Dilbert killed your job.

I do think there is a stark divide between people who go to college vs. people who don't. If you don't have a degree you're pretty much locked into shit jobs unless you manage to get unionized manufacturing work, which is in steady decline in this country. Even those people seem to have doublewides and cable, though, so how awful can it be?

[Tim Higgins]

A few points. First, as Matthew pointed out, these are not "quintiles," at least not in the sense that anyone who knows what quintiles are uses the term. Second, they do appear to be inflation adjusted dollars. Third, it is quite clear that the Washington Post has tried to draw conclusions from these data that cannot be drawn from it for reasons previously presented: the superficial analysis doesn't support them, and the more detailed analysis regarding changing demographics illustrates how no conclusion whatever can be drawn on this question.

I'd add that Evan's "statistics lie, trust the eye" remark concerns me. It reminds me of another quote - "There are three kinds of lies: lies, damned lies, and statistics." In truth there are three types of liars: liars, damned liars, and gawdamned liars who wave a truth in your face and tell you a lie with it. Properly understood, statistics give us perspective that our own eyes are incapable of. However, they need to be used carefully, unlike the Post's treatment of them here.

[Bill]

I don't know anything about what you do or where you're from or how you got there, so I would not presume to get into an argument along any of those lines, and I have no reason to suspect you haven't completely earned whatever it is you've achieved. But that certainly doesn't give you any standing to pour a bucket of shit all over people whose situations you clearly don't entirely understand.

Evan,

I don't recall saying ALL, but if I implied that, well, my bad. I should have said most, but maybe I'm too optimistic about the abilities of most human beings.

I'm still waiting for an example of someone who worked hard, studied hard, and was not disabled (or seriously disadvantaged in some other way) who failed. I'm sure there are some, but I bet that they're a very small percentage of Americans. As I mentioned before, I grew up in a welfare community, meaning that more than half of the families received government aid. Maybe society or their own families screwed them up, but the people of this town were lazy. They spent most of their time drinking, doing drugs, and screwing. They said things like, "Work ain't for everybody." They were awful parents, yet they had far more time for parenting than the good parents of that town. I have a cousin in prison who's girlfriend (who demanded that he quit his job and stay at home with her) and two kids are on welfare, an uncle who blames the world for his problems and refuses to take any work that is "beneath him," and numerous other relatives that a losers. And these are just my family members. I have seen the causes of poverty first hand. They are laziness, lack of personal responsibility, and government hand-outs. I'm fully ready to admit that poverty "back in the day" was a more complex issue, and that poverty around the world is as well, but in America these days, there are so many freaking opportunities to improve oneself. I just don't think that 95+% of Americans have anyone to blame but themselves for their failures.

[Guy]

Clark is now driving a male delivery van Is this Dan Savage's new business venture?

[Guy]

If we eliminated taxes (including Social Security and Medicare) on the first $50,000 earned by a family of four, I'm sure poor folks would appreciate it.

Another BS social engineering tax structure to reward politically approved behavior, ie being straight, married and producing a couple of apelets. I'm surprised to see such a suggestion on a Reason board. How about something a little more fair?

[Mcwop]

even if everyone is getting richer, it should be plainly obvious to most people who pay attention that this is generally socially corrosive

Under a progressive tax system you need the rich (in terms of income) to get filthy stinking rich, if you want those precious tax dollars (the ones taxed at the highest rates) to pay for those dandy social programs.

[Phil]

By the way, have you ever met someone who worked hard, studied hard, was not disabled, and was poor?

I'm sure I don't know, since questioning poor people to see what they did in life is not among my hobbies. I, on the other hand, did not make a positive claim about what causes poverty, and you did.

[R C Dean]

We value the freedom we now have but have no hope of ever retiring as our parents did and really hope we don't get sick.

Well, anyone who has had the kind of jobs you describe who doesn't have a nice nest egg set aside by the time they are pushing 50 can point to only one reason - their own crappy money management.

I know lots of boomers who have had six-figure incomes (hell, I know boomer couples where each has a six-figure income) and who have a negligible to negative net worth. Because they either spend it as fast as it comes in, or they made stupid investment decisions during the internet boom and lost all their paper assets in the bust.

The one guy I know who will retire in his mid-to-late 40s has never had a job that paid more than around $80K, would be my guess, but he is very disciplined with money. The bastard. 😉

I'm not much with hanging onto money myself, but at least I don't whine about it.

[Russ D]

Pretty laughable article.

The only way to make a somewhat accurate comparison is to take the real 20% quintiles of 1967, adjust the dollar figure breaks to 2003 dollars, and then see what the current percentages are at the new breaks.

[dead_elvis]

Quote:
"I'd add that Evan's "statistics lie, trust the eye" remark concerns me.

I wouldn't want to live in a country ruled on the basis of anecdotes any more than I would want to live in one ruled entirely by statistics.

[Mark Borok]

Article from Factcheck.org according to which the middle class has shrunk over the last few years, with most of the change being in a downwards direction. Admittedly too short a slice of time to indicate any long-term trends.

http://www.factcheck.org/article.aspx?docID=249

[pigwiggle]

"doesn't give you any standing to pour a bucket of shit all over people whose situations you clearly don't entirely understand."

The world is what it is, harsh and unfair. It's nice to hear you complain about your economicaly disadvantaged county while 3+ million African children shit themselves to death every year from unclean water. Even the lazy, stupid, and unfortunate have it good in the US.

"massive disparities in wealth tend to have politically destabilizing effects over time"

They are going to have to try real hard to get mine.

"Thank you ... for illustrating why I hate people."

Ditto, add yourself to that pile.

[Mr. Nice Guy]

The newspaper choice in DC is between the Pravda of the Potomac or the Moonie Rag.. I choose the former, because it can imitate objectivity from time to time. But yesterday's headline screamer almost prohibited me from wasting my 35 cents. I swear, this old liberal, anti-capitalist, class-warfare crap is very tiresome.

[Gadfly]

Brian and RC, I'm happy to hear that you are in complete control of your destinies. You will never get sick, divorced, have a handicapped child, have an accident, get fired, have your savings embezzled, go bankrupt or get old. I'm glad for you.

[fyodor]

it would be nice if the anti-egalitarians could admit that massive disparities in wealth tend to have politically destabilizing effects over time

Evan McElravy,

You assert this as if it's a well known fact, but it doesn't seem at all self-evident to me. Can you back it up? Or was this part of the "bullshit" covered in your disclaimer at the end of your subsequent paragraph? 🙂

[Brian Cook]

I think my point was that you shouldn't assume that crappy conditions for you and your small group of homogeneous friends necessarily translate to a wider trend, not that I am invincible and ageless. I wish that was my point, because that would be awesome.

[parse]

I worked hard (continue to work hard), studied hard (Phi Beta Kappa, and continue to study) and I'm poor ($32,000/year salary).

[LB]

"I was born a poor black child"

[joe]

"I have seen the causes of poverty first hand."

No, Bill, you have seen *some* of the causes of poverty first hand. You are generalizing too broadly from your own experience, and you are assuming that the most visible (to you) poor people are representative of all poor people.

In fact, most poor people are just like everyone else, except they have less money. That includes sharing the values of hard work (poor people work more hours than rich people, on average), and of not wanting to be seen to be poor, and dependant on others. They go to great lengths to avoid having people recognize that they're poor. Thus, your "lyin' eyes" don't include them in your sample of "what poor people are like," and you end up with a skewed vision of what poor people are like.

[pigwiggle]

parse-
Cry me a fucking river! The poor in this country have a better standard of living than 80% (this according to Ben Stein, who knows where he got it) of the entire world and you are hardly poor. You work less and earn more than most, suck it up. Incidentally, you earn $12,000/yr more than I do and I think I have a reasonably comfortable life. Your expectations are poor, not your bank account.

[R C Dean]

Gadfly opines: Brian and RC, I'm happy to hear that you are in complete control of your destinies. You will never get sick, divorced, have a handicapped child, have an accident, get fired, have your savings embezzled, go bankrupt or get old.

Well, lets see. I've been divorced, and therefore was technically insolvent for awhile (but never file for bankruptcy). I've been in accidents. I was fired just under a year ago (worked 8 hours a day to get a new job, now happy as a clam in my new position, thank you). I hope to get old. I freely admit that I am a poor money manager.

What I won't do is whine about any of it. I'm not in control of my destiny, but I am in control of myself.

[Jennifer]

Up through the 1970s, a person working full-time at minimum wage could afford to rent a decent apartment with about one week's pay; now that same apartment would cost about three and a half week's pay for a month's rent. I'd say that is significant. What good is it to be able to buy a cheap stereo if you can't afford a home to store it in?

As for those who shrug and say, "Well, those people shouldn't be working minimum wage jobs," perhaps you're right. But society needs people who will scrub toilets, dig ditches, sell hamburgers and other such unskilled jobs; what is wrong with letting people who do the crummy jobs make a decent living at it? Do you think we'd be better off in a world where only the creme de la creme have a chance at a decent life?

[seeker]

My anecdotal comments:

I grew up "poor". Never knew it. Single mother. She was on food stamps for a while. Worked her ass off and raised 3 boys by herself. I never made it to college but served in the USAF. Got fired from that due to boredom and trace amounts of plant by-product detected in my precious bodily fluids. 😉

Now I am VP of a successful software development company making 90K+ per year. I've been through poor, I like making money better. I worked my ass off and never gave up. Due to recent divorce proceedings, I feel about as poor as I have ever been but that is a passing phase. I know that I will catch up and in the end I will live comfortably.

For a while, I lived in South Dakota. Depressed economy, no money to go around. It sucked. I had a job as an electronics teacher at a local high school but just didn't make any money. I was poor. I knew it was time to change things and I did. I live in Denver now. I could have wallowed in my misery and stayed doing what I did but sometimes to change things you have to change things. People wash up naked on our shores, unable to even speak the language and become successful.

What's your excuse?

[joe]

seeker,

"I grew up "poor". Never knew it. Single mother. She was on food stamps for a while. Worked her ass off and raised 3 boys by herself."

I'll be she knew it.

[joe]

seeker,

"I grew up "poor". Never knew it. Single mother. She was on food stamps for a while. Worked her ass off and raised 3 boys by herself."

I'll be she knew it. Thank God for the food stamps and free public schools, eh?

[JDM]

Most statistically poor people are young. As a direct consequence of this, most poor people become un-poor later in their lives.

Politcal instability is not something that is going to happen as a result of income disparities, unless the people on the bottom are really suffering. There was a study that concluded that income was not a factor in happiness once it grew beyond about $50k a year. People in househlods which make $50k are just as happy as people in households making $10M. I don't recall if it was households or individuals, but it seems reasonable to conclude that we will eventually get to a point where income will not be a drag on the happiness of over half the country. Hardly the recipe for social upheaval or revolution.

"You will never get sick, divorced, have a handicapped child, have an accident, get fired, have your savings embezzled, go bankrupt or get old."

Criminy, you've had a tough life.

[Jennifer]

Seeker-
What was your mom's excuse?

[JDM]

Errr... Always edit out comments like "I don't recall if it was housholds or individuals" after you look up said fact. It was households.

[Scatalogicus]

Gadfly: I'll reframe one of your complaints. It is not that you "can't afford to get sick", rather you can't afford the fantastically improved medicine available today. The treatments and preventions available to your parents could likely be bought with the change sucked out of your couch or the deposits on Evan's beer bottles.

Overall, why are we concerned with income? The War on Poverty is already won. Our poor suffer from obesity, of all things. Safe water is available to essentially everyone. Few are stuffed family upon family into two-room shacks. Income equality is a separate issue from general welfare, and the welfare seems to be provided for. Where in the Constitution are we obligated to limit personal wealth?

[seeker]

joe,

You are correct. She knew it. But she never let us know it. She set the example of working hard and making ends meet.

I do not think that she was on food stamps for long. It was immediately after my scumbag dad left her for another woman...in Germany. Never sent child support. I saw him a handful of times growing up. My mom moved back home and lived in the house next to her parents. Relied heavily upon them. Do I think government handouts are a good idea? Not for long term. Could my mom have made it without them available? Maybe. We might have been skinnier that winter but we would have made it with all of the relatives around us.

Incidently, she built her own home in Naples, FL on 6.5 acres on the edge of town now. Has worked herself to a comfortable level and lives a good life. Zero college. No government handouts except that one winter in the late 60's.

Free public schools? We all pay taxes for those schools. Stop taking my tax money and I'll send my kids to charter school any day.

The system is as it is. That doesn't mean there are no benefits to it. It also doesn't mean that it isn't corrupt and inefficient and wrong to steal money from people (taxes). You seem to be saying that welfare and public schools are a good thing. My defense is that it is what exists now. I personally have never taken a government hand-out though there were times it would have helped. I believe changes could be made to steal less money from me and allow me to make better choices. If I were allowed to keep the $15,000 - $20,000 per year I hand over to the federal government, there is a lot I could do with it.

My personal beliefs are that anything government is or will be grossly inefficient.

"Thank God for food stamps and free public schools?" What school choices were there in the 60's? Yes, thank God the government has a monopoly... Food stamps? Desperate times require desperate measures...

[Isaac Bartram]

"Well, since the difference between $34,000 and $22,000 is so insignificant..."

Good thing planners don't have to use any math.

[seeker]

Jennifer,

My mom's excuse for what?

[crimethink]

Jennifer,

40 hours/week * $5.75/hr = $230/wk, which would cover a month's rent in a bare-bones, but still decent apartment in many cities. Are you saying that there are no decent apartments below $805 a month? If so, I live in a shithole.

[fyodor]

Here in Denver, efficiencies are going for about $400, so I'd say the reality is somewhere in between Jennifer's and crimethink's analyses.

But that's only part of the story anyway. What if there's a difference between how many people are making minimum wage? And then from the raw figures you'd have to factor in how many more current minimum wage earners are immigrants just getting started in this country. (Uh-oh, I hope I haven't inadvertently conjured up Lonewacko...)

[Ray D.]

Perhaps we need to stop for a moment and compare our "poor" people here in America to the poor in other countries. There is a reason why people will risk life and limb to come here and be our poor people.

I met a young man from Argentina a few years ago and I found his perspective to be very interesting. He came from a wealthy, prominent family in Argentina. He learned at an early age that everything revolved around who you are and who you know. He came here for a college education and was astounded to learn that the son of a plumber and the son of a lawyer would share an apartment and be close friends. He thought that it would be important and meaninful if he told people here in America that he came from a prominent family and that they had money, but nobody seemed to care.

The poor in America are not consigned to be forever poor. I think that is a fact that tends to get ignored when they look at the statitics.

[joe]

"Free public schools? We all pay taxes for those schools. Stop taking my tax money and I'll send my kids to charter school any day."

So your mom was paying a lot of taxes when you were in school?

[Kurt]

It's about time someone mentioned immigration; the two things that struck me about the article were the complete failure to mention immigration or any other mobility between quintiles, and the chart which showed that the number of households with double the median salary has grown much faster than the number with less than half the median.

[Jennifer]

Seeker-
For being poor, of course. But based upon your later post, it sounds like she had a good one.

[me]

"If people, i.e., the government, would leave me alone, I wouldn't hate them at all."

I like this one better: To quote the movie Barfly "I don't necessarily hate people, but I feel a lot better when they're not around".

[pigwiggle]

joe-
"So your mom was paying a lot of taxes when you were in school?"

No, her prospective employers were, her neighbors that perhaps otherwise could have been more forthcomming with charity, so on and so on. Perhaps I could give you a few bucks to educate your kids, or you can have the government steal it from my paycheck and waste two out of three dollars. Joe, if you are so interested in others well being why are you pushing to further fatten the American poor? There are others much worse off, how much charity are you sending them? As I said in an earlier post, 3+ million African children shit themselves to death every year from unclean drinking water. I think you concern is badly misplaced.

"since the difference between $34,000 and $22,000 is so insignificant"

What I could do with an extra grand a month! If its insignificant I can send you my mailing address.

[seeker]

Jennifer,

Thank you, yes. She did have a good one. But she didn't stay there and "cry in her beer". She worked hard and I have a great deal of love and respect for her.

-----

joe,

What pigwiggle said. You seem to be arguing from the other side of the circle. You seem to be saying that because of the burden our government has placed upon us, we need them. If it wasn't for the ropes the government has placed around our necks, we could never bear the burden that it requires of us. I'm grasping for the right analogy...

[crimethink]

fyodor,

In my hometown of Rochester, NY, there are (what I would consider) decent places for $250 a month; I'm sure the difference is due to WNY's shrinking economy. But in any case, I highly doubt that minimum wage has has been reduced by a factor of 3.5 since the 70s, even when adjusted for inflation; perhaps rents have gone up, but that has more to do with the reign of "smart growth" than anything else.

[joe]

Given the paucity of smart growth policies, it's a stretch to claim that they're contributing to housing prices.

seeker,

The government places little or no tax burden on the very poor. Though I agree, this burden should be removed from those who suffer under it.

Of course, when I suggesting cutting poor people's taxes on another thread, it was roundly derided as "redistributionist."

[joe]

Point of fact, crimethink, many of the government policies that HAVE actually driven up housing prices by artificially lowering the supply of housing, particularly inexpensive housing, are strenuously opposed by smart growth proponents. Forbidding rental housing, high minimum lot sizes, low density, large setbacks, commercial districts with no housing allowed...

And by segregating housing from jobs, these "dumb growth" policies served to increase the number of low income people, by reducing the access poor communities have to work, and by increasing the cost/difficulty of getting to the jobs.

[seeker]

joe,

Well, at least you stopped cutting down my mother 😉 them's fightin' words, ya know.

I've always been a flat tax kind of guy. If Franklin was right, death and taxes and all that, then make it a fair cut across the board. Don't punish me for making more money. The problem with any kind of exceptions is the whole encroachment thing. Let's not tax any income less than $1000 per year...then it is $2k...then it is $10k...then it is $20k.

Remember where the income tax came from. It was like .5% on $100k per year or more (or something like that). Strictly temporary. Just to pay off the war effort, you know. Now there is a huge bloated creature called the IRS that feeds on the hard-working citizens of these United States and redistributes a fraction of what it collects. I say shoot it and dump it into the ocean...

Can I see a show of hands of anyone who would miss the IRSzilla?

Tree of Liberty, Blood of Patriots. I think the Jefferson quote in simpler terms really means a completely overhauling of government agencies. Start over, so to speak...by force if necessary. If we are going to have taxes, maybe there should be an agency to manage those taxes. Should be a state agency...or why not local? But every now and then, fire everyone and start over. Clean house. Reset the bloated corruption meter back to zero and watch it rise again.

Were there schools before World War II? How did they function if there weren't any income taxes?

[fyodor]

crimethink,

Apologies, I was going to mention, but forgot to, that I have no idea whether Jennifer's depiction of rent compared to minimum wage in the 70's is accurate.

But I agree that if housing has really gone up more than indigenous poor people's incomes, it's likely more a reflection of restrictive zoning (whatever else it's called; please! don't get joe started!!) than a comment on the state of the economy.

[joe]

"If Franklin was right, death and taxes and all that, then make it a fair cut across the board. Don't punish me for making more money."

So you're saying that a rich family and a poor family should pay exactly the same tax bill, in dollars, regardless of income? Of course you're not saying that, you want them to pay the same percentage. But now we're arguing about the degree of progressivity, not whether there should be any.

"Fair cut across the board?" Is it fair to have a tax system that makes it impossible for one family to buy a car when the old one dies, but does not preclude another family from doing the same? How are we to measure this fairness? Same dollar value and same % of income seem to ignore the real world conditions of taxpayers.

fyodor,

Another cause of the housing crisis is that the geographic area within which a the commuters of a metro region can commute to the jobs in that region has been fixed since the 1950s. Cars don't go any faster, so we're basically talking about a perimeter around central cities that is the same now as it was in 1958. Yet in 1958, even with restrictive zoning, there were enough potential house lots that land prices could be quite low. Now, many metro areas are largely built out, even in the suburbs. Any farther out, and the homes are really only available to people who don't have to commute to jobs, or the limited number of people who can get by on the small number of jobs available in exurbs. Combined with restrictive zoning, this limits the housing supply.

[seeker]

joe,

What does buying a car have to do with paying taxes? Generally, lower income families buy cheaper cars anyway. In fact, I just got a great deal on a 2000 Lumina. Paid $4000 for it. Runs great. It's my only car. Sold my '87 Nova. I'm livin' high on the hog now! Or are you saying that lower income people should have the same chance to buy a $40,000 SUV as their wealthy neighbors at the top of the hill? That would certainly be fair.

Not quite sure where you were going with the same tax dollars across the board. Of course I did not say that. I suggested a flat tax. Let's just call it 10% across the board. Absolutely it is fair for the lower income families to pay their 10% just as it is for the highest income families to pay their 10%. It is the ultimate in fairness. Anything else is "redistributionist".

[pigwiggle]

What seems fair to me would be each individual paying for those parts of the public infrastructure they use/consume. This would work best when most of the things we consider part of the public infrastructure; fire protection, road construction maintenance, education, charity, is privately owned and administered.

[Michael Clem]

Joe,

You're playing word games. A flat tax percentage creates a tax that's strictly proportional to the income, not a "progressive" tax.
I'm not saying that I especially favor a flat tax, but it would be better than the current mishmash of complexity and loopholes and the AMT.

[thoreau]

I favor a flat tax over the current system mostly for reasons of simplicity.

However, what I really want (aside from abolition of all taxes and privatization of all services, yadda yadda yadda) is the elimination of tax credits, deductions (other than business expenses, obviously, since the tax is on profits), loopholes, and other market distortions that favor one activity over another.

Although I'd obviously like to live in the Property Republic (Not a Democracy) of Libertopia, really I'd be pretty happy if the gov't just did the following:

1) Flatten the income tax and abolish all of the loopholes, setting the tax rate to be revenue-neutral.
2) Abolish all tarriffs, import quotas, etc.
3) Legalize drugs, including non-prescription use of narcotics, stimulants, etc.
4) Eliminate farm subsidies
5) Implement means testing for social security and medicare (not complete abolition, but it would reduce the number of recipients) WITHOUT INCREASING BENEFITS
6) Eliminate all restrictions on handgun ownership for non-felons, including concealed carry
7) Eliminate any zoning and other regulations that impede construction of affordable housing

I realize that the above measures are far from ideal, but they would all be solid steps that would improve the quality of life while making the gov't a lot smaller. If a political party advocated just these measures I'd be pretty happy. The purists could bitch, of course, but I'd take that platform over anything the GOP leadership is proposing right now.

[joe]

"What does buying a car have to do with paying taxes?" If taxation takes too much of a bite out of your income, you might not be able to buy the car. I need to explain this on Reason Magazine's blog page? Sheesh.

Michael, doesn't "strictly proportionate to income" mean that richer people are paying more taxes than poorer people? Aren't you recommending that we "punish" people who earn 10X as much as the median income by "stealing" 10X as much of their money? Why, oh why, should Bill Gates be punished for his success by having the government extort more money from him than from a miserable failure like me? (I am aware of the standard usages, btw. Do you have anything to add about the substance of my ideas?)

The obvious answer is, as with bankrobbers, "because that's where the money is." You appear to buy this logic. So if it's ok to take $300 million from Bill Gates every year, and $300 from a school lunch lady, why is it prima facie wrong to take $301 million from bill, so 3000 lunch ladies can feed their kids better? Why is making the % of dollars equal the key to fairness, and not, say, the absolute dollar value, or some figure arrived at via a social utility formula?

[seeker]

I too only prefer the flat tax as far better than the current system. I do have difficulty envisioning a system where everything is use based though. I'm not against it, it is just so far out of where we are right now it is difficult to imagine.

How much would my tolls cost me on my way to work? $100 each way? Do I put a dollar in each traffic light? I suppose that could be handled by the company that owns the road. I just don't know. Right now, the pendulum is swinging in an oppressive direction. I would like to see it swing back the other way a little...ok, a lot.

I think thoreau enumerated it pretty well. None of his items are outside of the realm of reason yet would move us in the right direction.

[A N T I X O T (prounounced And]

I never read your web site.

[jc]

Jennifer's and joe's comments made me wonder... I don't think I've seen an apartment building constructed in the last 20 years. I've seen loads of multi-family housing go up, but not one rental property. I'm sure many of the condos that are built are being rented out, but I'd bet most of this is on an informal basis. And I'd bet the reason for that is the owners find all the regulations on who you MUST rent to a big deterrent. In short, the problem Jennifer posits is still a suply and demand issue and government regulations (either not allowing zoning of apartments OR not allowing landlords to refuse certain tenants) are a huge part of reducing supply.

[Jason Ligon]

"So if it's ok to take $300 million from Bill Gates every year, and $300 from a school lunch lady, why is it prima facie wrong to take $301 million from bill, so 3000 lunch ladies can feed their kids better? Why is making the % of dollars equal the key to fairness, and not, say, the absolute dollar value, or some figure arrived at via a social utility formula?"

joe gets points here for pointing out a flawed argument you hear quite a bit. A flat tax is progressive. Other forms of taxation are usually more progressive. The don't steal my money argument is subject to joe's analysis. The correct phrasing is don't steal more of my money than you have to to support a small government.

The virtue of the flat tax is that it is not open ended. From a libertarian perspective, the tax code is used as a reward system whereby people who want more stuff for free can vote themselves goodies at no cost. Differential taxation makes this possible. If every time I wanted more stuff, I had to raise taxes on myself, I might reconsider the value of legislating myself wealth. The consensus tax rate when everyone has to pay the same percent will settle on a lower amount, it is believed.

Additionally, the flat tax should in theory prevent the government from inappropriately (from the libertarian perspective) encouraging certain behaviors through the tax code.

[Russ D]

thoreau,

1) Flatten the income tax and abolish all of the loopholes, setting the tax rate to be revenue-neutral.

5) Implement means testing for social security and medicare (not complete abolition, but it would reduce the number of recipients) WITHOUT INCREASING BENEFITS

This is where I find a problem with so much "fairness" talk. From the point of view of someone like joe, the "progressive" tax is a sort of means testing - you can afford to pay at a higher rate so your tax rate should be proportionately higher.

If you want to play the progressive angle on output (which is what means testing for benefits is), then you're opening the door for the progressive angle on the input (taxation) side. And vice versa. And I don't think that's a solid step at all, that's just more of the same.

Progressivism creates the loopholes and confusion. As a selfish individual I'm in favor of every loophole that helps me, and I can sleep easy knowing that no loopholes are ever created to purposely hurt anyone. It just shakes out that way over time.

[thoreau]

Russ D-

1) I support eliminating loopholes for the simple reason that various credits, exemptions, etc. are given for whatever behavior Congress deems worthy. Or, more accurately, for whatever behavior enough lobbyists and campaign contributors favor. The result is a distortion of the market. A politically connected industry can enjoy tax breaks for themselves and even people who buy their products, allowing them to defeat competitors who might otherwise prevail in a free market.

A tax code without special loopholes, deductions, credits, exemptions, etc. would be a step away from economic micromanagement.

5) I support means-testing as a politically feasible way to reduce the amount of gov't involvement in medicine. When the gov't is involved in providing health care for every single senior citizen, that fuels the perception that health care simply can't be trusted to the market. If fewer people receive their health care from the gov't and the sky doesn't fall, that will reframe the terms of the debate. It will enable discussion of wonkish measures like health savings accounts and whatever else the folks in think-tanks are thinking about, not to mention the standard response of private charity for poor elderly people.

Now, the progressivity of means-testing might seem anathema to some, but the bottom line is that it's the only politically feasible way to reduce the number of people receiving their health care from the gov't. As we move in that direction, the terms of the debate can change.

[Steven Crane]

'Round here, it's not so much the income tax that gets you as it is the property tax. The poor/lower middle class have fairly reasonable tax bills that allow them to keep their houses... however, my parents' $7000(and rising) yearly property tax bill is forcing them to move.

Also, though we live in the one of the poorest counties in Southern Illinois (which is saying a lot), the tax assessor in this county is paid quite a bit more than the tax assessors in more affluent counties.

[parse]

I said I was poor because someone asked if there were people who worked hard, studied hard, and who were poor.

I wasn't complaining about being poor--there's nothing in my comments that suggests a complaint. And I included my income so that people who think that making $34,000 a year doesn't qualify as poor can decide I'm not an example of hard working, hard studying poor folk.

But to read posters complaining that the poor should quit whining and start working and then find out that to some of them, the mere statement "I am poor" qualifies as complaining is enlightening.

[Scatalogicus]

joe argues just like the liberal in my head. If only the government would enact the perfect set of "fair" taxation and "benevolent" regulation, we could achieve Utopia. It has never happened. The system creates incentives for further abuse. All the word games we play will not alter the underlying truth that taking from those who are not willing to give is theft and limiting choice through regulation deprives people of their liberty.

As many times as I've heard the arguments for compassionate coercion, I remain befuddled as to how joe and the guy in my head can keep their positions. Does history offer no lesson to them? They don't trust government by pronouncement, yet persistently endorse its powers through argument and proposition. Somebody in my head is nuts.

[Gadfly]

RC, please don't misunderstand. I'm not whining. I'm president of my own little company and my golf game is coming around.

My point was that upper level salaries in large companies are now targets for elimination. The traditional thought that you climb the ladder through a company while depending on their bennies and pensions is dying. Companies who jettison this experienced set of overseers (non productive workers, I believe they're called) set themselves up for rogue employees doing serious damage. Enron, WorldCom and Abu Ghraib come to mind.

It seems now you need to be an independent contractor to get any action. Stability, dependability, redundancy and after sale maintenance is an afterthought. Production is king.

In that huge numbers of the work force are dependent on a paycheck, retain the hope they can "move up" in their organization, believe the crap they are fed that they are valued (watch the stock price of any company when they announce layoffs - it goes up) and don't have entrepreneur genes, the chances of an increasing gap between rich and poor increases.

I can't prove this. I just think it.

[Dan]

Up through the 1970s, a person working full-time at minimum wage could afford to rent a decent apartment with about one week's pay; now that same apartment would cost about three and a half week's pay for a month's rent.

That seems unlikely, since the average constant-dollar value of the minum wage during the 60s and 70s was only about 50% higher than it is today. The average constant-dollar rent would have had to have doubled since then, for your claim to be true.

I'd say that is significant.

I wouldn't. But then, I've actually read the Bureau of Labor Statistics' analysis of minimum-wage earners, and am therefore aware that less than one percent people with full-time jobs earn minimum wage.

There aren't any solid statistics on how many people earned minimum wage back in the mythical "golden years" of the 1960s and 70s. But we do have records from the early 80s, which allow us to learn that the portion of the workforce earning minimum wage has fallen to less than one-fifth its 1980 level.

But society needs people who will scrub toilets, dig ditches, sell hamburgers and other such unskilled jobs; what is wrong with letting people who do the crummy jobs make a decent living at it?

What's wrong with it is that their labor isn't worth a decent living. There are three hundred million people on Earth who could scrub a toilet clean without any training, experience, intelligence, or education. It is simply ridiculous to insist that anyone who so chooses should be able to earn a living doing it.

Right now, the company I work for employs a small cleaning service. Three people spend around an hour cleaning the office each day; it probably costs us $4000 a year. If you think we'd pay $8000, or $12000, or $16000 for that, you're insane. We'd live with a dirtier office, and have the cleaners come in less often.

We don't *need* people to scrub toilets for us; we can do it ourselves, albeit less frequently. We don't need people to flip hamburgers -- we can just not buy hamburgers, or do it ourselves. We don't need people to dig ditches; machines can do it. We *use* people for these things because there are people who are willing to do these things for prices we're willing to pay.

If a Wendy's hamburger cost $8.00 instead of $3.50, people wouldn't eat there anymore. If hiring some half-wit high school dropout to dig a hole in the ground cost as much as backhoe rental, people wouldn't hire the half-wit. Wealth can't be magically created by legislation, and the value of a person's labor can't be magically increased by a minimum wage. All you can do is increase the cost of the person's labor -- which means that employers buy less of it.

Do you think we'd be better off in a world where only the creme de la creme have a chance at a decent life?

Since when does over 99% of the full-time workforce qualify for "creme de la creme" status? You don't have to be part of the "creme de la creme" to earn more than minimum wage in America. You just have to be able to tie your own shoelaces without an instruction manual.

[Dan]

The traditional thought that you climb the ladder through a company while depending on their bennies and pensions is dying.

I've been hearing people whine about the "traditional career" was "dying" for over twenty years now. I don't know how much sympathy you morons are expecting. If, after all this time, you're *still* surprised by layoffs, then all I can say is that I hope you didn't manage to have any kids. One generation of clueless businessmen is enough.

Enron, WorldCom and Abu Ghraib come to mind.

Abu Ghraib, the fault of corporate layoffs of middle managers... fascinating.

[pigwiggle]

parse-
Now I see the set up, don?t pat yourself on the back too hard. No one really says ?I?m poor? without something soon to follow. Usually ?give me some of yours?, so the response wasn?t really that enlightening, was it?

[pigwiggle]

My wife began her medical residency this year. We calculated the hours she works then, including overtime and so forth, backed out the wage from the salary; $4.25/hr. Whenever I hear ?working poor? I want to start throwing. ?working poor? usually means ?surprisingly I can?t provide for a family of four on 40 hour of $6.00/hr?. Get two jobs, hell, get three. Here in Salt Lake I can?t drive a block downtown without seeing a posting for some crappy job or other. When I was in college I cleaned industrial kitchens from midnight to 6am, my boss couldn?t keep the positions filled. The work totally sucked, but then again I wasn?t responsible for a family.

[Ray D.]

We also need to remember that some of the people lumped into the "poor" category are high school and college students who are working part-time jobs.

My daughter is a "minimum wage" earner, yet she has a brand new cell phone and a car that is newer than mine. Should she still be considered one of the "working poor"?

[joe]

jc,

Where do you live? The paucity of new rental construction in your area could result from any number of causes.

What's been very common over the past 50 years is for older neighborhoods, especially city neighborhoods, to have their housing stock, built in the 1880s-1930s, converted from single family to multifamily. There aren't new apartment buildings being built, because the demand is being met elsewhere. Now, if this goes too far, it can bring its own set of problems.

Also, with the home mortgage deduction influencing the market, most people can get into a mortgage, even if it's for a two bedroom garage under townhouse. The rental market is shrinking as a % of the overall housing market, and has been for half a century, because of this. What is left is, mostly, poor people (and you're not going to meet their demand with expensive new construction, but with cheaper conversion of old buildings in less desireable areas), and people whose lifestyles make renting more appealing (this set of people - students, people who move a lot, etc.) often have other reasons for wanting to be in older cities, so once again, they're demand is being met in already-built-out areas.

Are you basing your observation on the suburbs only? There could be quite a bit of new rental construction in the core city that you just aren't seeing.

[Russ D]

thoreau,

I support means-testing as a politically feasible way to reduce the amount of gov't involvement in medicine.

You could reduce government involvement by capping benefits across the board which would be "flatter" and less corruptible. Perhaps that's less politically feasible, but it is certainly more understandable as "fair" and more apt to reduce government payouts.

But it misses the point which is that the medical community WANTS government involvement in medicine because it keeps prices high. That's the political feasibility that needs to be addressed. Means testing is guaranteed to be subject to special loopholes, deductions, credits, exemptions, etc., and none of this guarantees any reduced government involvement and in fact may lead to increased involvement.

I agree with you in spirit, but I can just hear the politicians all agreeing on means testing today and then we'll be back here ten years later complaining about the corrupt system and the increased taxes to pay for it. Political feasibility makes no sense if it's in opposition to financial feasibility.

[rob]

Dan: "Abu Ghraib, the fault of corporate layoffs of middle managers... fascinating."

Exactly true. Lack of mid and senior-level leadership due to low mannning levels led to lack of supervision at Abu Ghraib and the opportunity for low-level personnel to have too much latitude... Hence, the abuses occurred due to corporate layoffs of middle managers.

Confused? Allow me to explain a bit further:

I would argue that the Dept of Defense has been following EXACTLY the same sort of nonsensical, self-defeating and organization-gutting "down-sizing/right-sizing" strategies that companies like Enron, Worldcom, etc. have followed to their detriment.

I clearly remember the bad old days of RIF (Reduction In Force) that stripped senior and mid-level leadership and pretty much anyone with any significant "corporate memory." Worse, that brain-dead manning strategy/human resources approach is making a comeback despite fighting a several-front war.

It looks good on paper, and it even gives civilian corporations a temporary stock boost. But the long-term damage is profound, and I would venture to say that examples of large corporations foundering can be directly related to previously gutting the company's most valuable resource: people who are knowledgeable about and dedicated to their organization.

Dan: "If, after all this time, you're *still* surprised by layoffs, then all I can say is that I hope you didn't manage to have any kids. One generation of clueless businessmen is enough."

I'm only surprised that clueless businessmen (or in DoD's case political and military leadership) continue to act against the organization's own self-interest by gutting them through extremely damaging manpower/HR policies. Of course, it requires understanding that what can temporarily benefit an organization in the short-term can be disastrous in the mid- and long-term. Clueless indeed.

I realize that this was Gadfly's argument to clarify and not mine, but when I read that argument and Dan's subsequent post, the light came on and I couldn't resist noodling through it "out loud."

[parse]

Pigwiggle

Nothing to follow. I'm poor. That's it. I'm not asking for a handout--I'm not even asking for a hand. The thing is, some people work hard at other things than getting rich (or even than getting economically comfortable). I'm one of them. That's my choice, I take responsibility for it, and I'm not complaining about the consequences. I'm just pointing out that the claim that no hard-working/hard studying people are poor doesn't describe my experience.

So you'll have to revise your conclusion that no one says "I'm poor" without some hat in hand follow-up.

[Wild Pegasus]

In tax parlance, "progressive" is used for increasing rates as income increases, not increasing amounts as income increases. Whether you agree or disagree that this term is being used correctly, this is how the term is used in tax proposals.

I'm trying to sift through the numbers to figure out if people are actually doing better than they were in the 60s and 70s, and if so, if they're doing better because more women have full-time careers, and if so, if it's because women have to work for the family to keep up a standard of living or because household chores are easier than they used to be or to buy bigger, nicer things.

Statistics don't really mean much because so much is different now than it was in 1960, economically, culturally, and politically.

Of course, as a market anarchist, I support the abolition of the state, including all taxation, on natural law grounds.

- Josh

[Dan]

Exactly true. Lack of mid and senior-level leadership due to low mannning levels led to lack of supervision at Abu Ghraib and the opportunity for low-level personnel to have too much latitude... Hence, the abuses occurred due to corporate layoffs of middle managers

That's the second stupidest thing I've seen in this thread; I'm afraid Gadfly still has you beat.

I'm only surprised that clueless businessmen (or in DoD's case political and military leadership) continue to act against the organization's own self-interest by gutting them through extremely damaging manpower/HR policies.

As opposed to the traditional alternative of "keep the dead weight until you go belly-up".

Of course, it requires understanding that what can temporarily benefit an organization in the short-term can be disastrous in the mid- and long-term. Clueless indeed.

If one overlooks the economic boom, dramatic increase in productivity, and decrease in overall unemployment that we have enjoyed since businesses adopted these policies then, yeah, I can see how one might arrive at the amusing conclusion that the policies are "clueless".

[Gadfly]

Dan is obviously of that lean, mean fighting machine, Michael Milkin generation. The idea is to wring every penny out of a company as fast and efficiently as possible. Little care for the future since you'll get yours anyway and bankruptcy is painless for the execs.

In fact, bankruptcies are good - economic Darwinism in action - and given our current environment we are doing great. Bankruptcies (and debt) are at an alltime high. No matter that shareholders and pensioners are last in line at Court.

Like a fast schooner racing for the horizon, when the wind dies a little, we start tossing off "baggage" to maintain speed. When that's done we adjust the speedometer to make it appear we're not losing ground. The wind comes back up but now we don't have any "baggage" to take advantage of it so we just borrow against the next puff of wind. When all else fails the cap'n hops a new boat and leaves the leftover "baggage" to flounder. That is our economic model.

[rob]

Hahahah! You nearly made me spew water out of my nose Dan. That's a devastating attack: "You're stupid." Got to remember that one the next time I have absolutely no response to someone else's statement! Kind of an all-purpose no-logic response that I'm sure wowed them in the 1st grade.

I'll respond to the other 2 nonsensical one-liners like this:

1. That's the stupidest thing I've ever heard.
2. That's the second stupidest thing I've ever heard.

Obviously, this makes me the undisputed winner of this argument, based on the rules implied by Dan's response. I'd follow up with "you're a poopy boo-boo breath turdy-head," but that would just be running up the scoreboard, right?

Seriously...

1. I didn't say that dead weight isn't a reasonable source for lay-offs. Don't attack a straw man. (That's nearly as much bad form as ad hominem attacks, "stupid.") I said the military went through cuts in the 90s that pushed out people who were dedicated, knowledgeable, essential ASSETS to their organization who were necessary for it to function correctly. Facing operations that require the US to call on the Reserves and Nat'l Guard certainly seem to be proof that we don't have enough regular military personnel to handle the aftermath of the successful military operations in Afghanistan and Iraq.

2. Sure, as long as we're overlooking the times that haven't led to the economic boom because of bad HR practices that contributed to their problems and/or downfall (like Enron, Worldcom and Abu Ghraib) you can focus on the corporations that are successful. But that wasn't the point, doesn't respond to my post, and you know it. (But that's the beauty of the straw man argument, it doubles nicely as a dodge, right?)

At any rate, immaturity, dirty pool and intellectual dishonesty shouldn't trump logic, sensible discourse and Reason. So for stupid things said on Reason, I think Dan should put on his pointy dunce cap and go to the head of the class.