Inequality

Don't Mind the Gap

What matters is income mobility, not income inequality.

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I hate to be the bearer of good news just as the Occupy Wall Street movement is gathering steam, but protesters can stop worrying about rising inequality and go home. New evidence suggests that the super-rich got hit by the recession much harder than the rest of the 99 percent. This doesn't mean that they will be filing for food stamps any time soon. But it does mean that, contrary to progressive mythology, natural market forces might be restoring some semblance of cosmic justice.

There is no doubt that the cupidity of Wall Street fat cats combined with the perverse incentives established by federal policy created a financial bubble from which the uber-wealthy reaped rich rewards. In fact, over the last three decades, the top 1 percent of earners more than doubled their share of the national income from 8 to 17 percent, the Congressional Budget Office said last week. And it wasn't because they generated real value for the economy. Rather, notes Tyler Cowen, an economist at George Mason University, the expectation of government bailouts prompted financial managers to engage in riskier investment practices such as "shorting volatility" than they otherwise would have, ignoring long-term consequences in exchange for fat, immediate paychecks.

But "long-term" eventually arrived. New data from the University of Chicago's Steven Kaplan shows that, despite government bailouts, in 2008 and 2009 the adjusted gross income of the top 1 percent—a disproportionate number of whom work in the financial industry—fell to 1997 levels. All in all, the fat cats took a 20 percent income hit, compared with the 7 percent lower earners suffered in the aggregate. Few economists believe that the super-rich will ever reclaim all their pre-bubble earnings.

But if the wealthy are not as well off as they once were, the middle classes were never as poorly off as liberal pundits claim. Indeed, their case that income disparity is growing rests on the notion that national productivity grew four times faster (1.95 percent per year) than median household income (0.49 percent per year) between 1979 and 2007. The remaining 1.46 percent in annual productivity gains, they postulate, must have gone straight into the Swiss bank accounts of the rich.

But there are enough holes in this argument for a Zuccotti Park cleanup crew to drive a fleet of garbage trucks through. For starters, Northwestern University economist Robert Gordon has pointed out that this analysis is based on the common price index, a number that both overstates the growth in real income among the haves and understates it for the have-nots. Indeed, globalization and big-box shopping outlets such as Walmart—the very forces that liberals blame for inequality—have vastly reduced prices for modest-income folks who shop at such venues. But the Paris Hiltons of the world who patronize stores like Versace and Roberto Cavalli haven't benefited as much, because these businesses are almost completely immune to competitive price pressures. Once the productivity data is adjusted for such factors, Gordon found, the gap between the rich and poor grew only by 0.16 percent per year—or one-tenth of the 1.46 percent that liberals tout.

But none of this says anything about what Cowen has dubbed the "personal well-being gap"—the only gap that matters. Indeed, this gap, which measures the difference between basic goods that average people and gazillionaires like Bill Gates can afford, has been steadily closing. Gates might have personal physicians, private jets, and multiple computers. But thanks to technology-driven increases in productivity, almost everyone can afford bypass surgery, vacations and Internet access.

In America, well-being mobility, in a sense, comes to you without you having to go it. You don't have to be income-mobile to improve your quality of life. But that doesn't mean that Americans don't have income mobility. Far from it. Odds are, anyone who makes basically sensible life choices such as going to college, getting and staying married (preferably to a working spouse), and working full-time will find themselves in the top income quintile in their peak earning years.

This allows more Americans to be "threshold earners": After they reach a certain income level, they can trade more work for greater leisure, a luxury that only the filthy rich enjoy in poor countries. Were this not the case, the ranks of the Zuccotti Park protesters might have been thinner by about a third. A recent survey by business analyst Harrison Schultz and Baruch College professor Hector Cordero-Guzman found that about 30 percent of them had individual incomes between $50,000 and $150,000-plus (about the same percentage as are under- and unemployed). These people have obviously decided that they have enough money, and that they'd rather use their spare time protesting than working.

Surplus wealth, then, is driving the Occupy Wall Street movement as much as the alleged growth of income inequality. Somewhere, Joseph Schumpeter, the political economist who predicted that the very wealth that capitalism generates will undermine the intellectual case for capitalism's existence, must be saying, "I told you so."

Reason Foundation Senior Analyst Shikha Dalmia is a columnist at The Daily, where this column originally appeared.

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  1. But none of this says anything about what Cowen has dubbed the “personal well-being gap”?the only gap that matters. Indeed, this gap, which measures the difference between basic goods that average people and gazillionaires like Bill Gates can afford, has been steadily closing.

    But, it’s still not FAIRRRR!!!111!!!

    1. True.
      My income has dropped dramatically in the last two years but it has affected very little. We cook a little more, go out a little less and wait for movies to hit the cheap Matinee at the old Byrd Theater.
      And when I find something better than the job I have now, we’ll probably drift back into more expensive habits.

      1. FYI, someone seems to have put you into the reasonable troll list.

      2. Your username sounds like a White Indian knockoff.

        He is a paleodiet person.

      3. And when I find something better than the job I have now, we’ll probably drift back into more expensive habits.
        ——————————-
        ain’t that the truth. Perhaps instead of worrying about what other folks are making with this faux “income inequality” issue, people could adjust their own habits. Here we are, the most prosperous nation on earth where people take cell phones, flat screens, comfortable housing, plentiful food, etc etc for granted and a bunch of whiny ass children is pissed at guys who busted their asses to make good money.

    2. “Rather, notes Tyler Cowen, an economist at George Mason University, the expectation of government bailouts prompted financial managers to engage in riskier investment practices such as “shorting volatility” than they otherwise would have,”
      _
      utter wingnut rubbish. first the CRA did NOT mandate the targeting of degenerate credit scores intended to fail which were then bundled and shorted with NO disclosure to shareholders or investors.

      >the CUNA & AIG suits vs BoA & JP Morgan charge [MISREPRESENTATION] & [GROSS MALFEASENCE]…which the CRA did NOT mandate nor advocate.

      1. holy fuck im so fucking stupid even i don’t know what my point is

        1. no the point is very clear about the continued wingnut [LIEZ]

          1. herp derp de derp [MEMEZ]

      2. Why are you conflating the CRA with expectations of government bailouts?

        1. cuz im a fucking moron who can barely wipe my own ass

          1. better than a spoofer fool like you

            1. moar wingnutz spoofer LIEZ

        2. no conflation mgd. these financial mgrs misrepresented mortgage securities as sound investments to shareholders & investors…whom the wingnutz have thrown under the bus while apologising for wallstreet execs

          1. I have colleagues who say “it was greed” Very sophisticated analysis.

            But in a properly working market, there are risks which put a damper on greed.

            With sticks like the CRA and carrots like bailouts and tax exemptions, they could line their own pockets at the same time as they paraded as patriotic americans doing what their govt. wanted and helping the little people at the same time. Win-win-win until the bubble burst.

            1. conduct aside, their ethics stunk regardless of perceived incentives. not disclosing to investors or shareholders is malfeasence & misrepresentation.

          2. Only you are to blame if you take bad advice.

            Fool me once, shame on you. Fool me twice, shame on me.

            If it sounds too good to be true, it probably its.

            etc. etc.

            1. bad advice (opinion) /= misrepresentation & malfeasence

            2. From a libertarian standpoint, tha is not the case and o2 is correct. Fraud is actionable in cases of misrepresentation. It all depends on the underlying contract of the given case and the implicit and explicit guarantees, but o2 is essentially correct.

          3. At the foreclosure rates produced by the Fed’s bubble policies, they WERE sound investments.

            That’s the central fact in the Meltdown discussion that people are determined to overlook.

            The data was on subprime’s side for more than a decade (which is an eternity in securities market terms).

            The performance of these securities tanked only when the underlying macro situation changed.

            “But it’s common sense that would happen!” No, it’s not. In a positivist world there’s no such thing as common sense.

      3. Fannie Mae and Freddie Mac weren’t really examining the product they were buying that closely, now were they?

        1. moar wingnutz LIEZ

        2. u mean the investments which were {MISREPRESENTED] by ratings cos who were in collusion?

          1. if i could ever make a cogent argument about anything it would signal the fucking apocalypse!

            1. wrong again spoofer fool

              1. ^ spoofer fool wingnutz

                1. ashamed to use ur own name sarcasmic?

                2. Goddammit, your metastable molecular architecture has gone from purely theoretical to downright SILLY.

          2. Yes. Exactly. They managed to screw with all of it so much that they even managed to turn how the ratings agencies worked on its head.

            They being politicians.

            1. the suits cite malfeasence & misrepresentation NOT politicans

              1. oh, i see, the lawsuits always point to the truth…

                1. no, but the PROOF of malfeasence & misrepresentation certainly will.

  2. http://finance.yahoo.com/news/…..;=&ccode;=

    Greece to Europe: “Fuck you for trying to help us!”

    1. Shorter Greece: “Fuck You. OPA!”

      Look upon Greece, Reasonites. Therein lays the fate of California.

      1. May God have mercy on our souls.

        1. As a property owner in California I am worried. But since my condo is in the very back of the complex, I have a faint hope that the 99% hordes will be sated from eating my neighbors before they reach me.

      2. Shorter Greece: “Fuck You. OPA!”
        ————————–

        knocks down ouzo shot and smashes glass into fireplace. Cue the bouzoukis.

    2. End result: Greece will be pushed out of the EU. Chaos will ensue. UN peacekeepers will be called in within the decade.

      Or maybe future bailouts for Greece will simply be pushed onto the US taxpayer and chaos will not ensue.

    3. Destroyed by democracy. I think it’s brilliant — the Greeks keep accusing their leaders of treason for make hard choices brought about the voters’ greed and childishness. They’re basically forcing the voters to own the failure with this referendum. It’s beautiful, really.

  3. Odds are, anyone who makes basically sensible life choices such as going to college, getting and staying married (preferably to a working spouse), and working full-time will find themselves in the top income quintile in their peak earning years.

    This isn’t seen as fair because it requires foresight and consistent effort over a long period of time.

    You’re supposed to be able to completely fuck up every opportunity, for a long time, and then be instantly successful as soon as you decide to apply yourself.

    AND you’re never supposed to have to defer any kind of gratification or choose among different life alternatives that are mutually exclusive.

    Particularly with your choices in relationships. If capitalism won’t allow you to have a stable career and life while serially fucking criminal thugs and bearing their children, what good is it? How dare you say I have to choose between going to work and bearing yet another bastard? Who are you to impose your views on children on me?

    1. Because the precious little snowflakes have been told all their lives they can have it all and have never been taught about competition and failure (everyone gets a trophy, yay!) so to suddemly hold them responsible just isn’t FAIRRR!!!11!!

      1. …for everything for which you are responsible?

        1. …with the sound of gambol.

    2. Anyway, Fluffy, we all know wealth isn’t really earned, it’s just ‘distrubuted’ so they deserve their fair share. Toni and Minge told me so.

    3. This is very easily explained Fuffy: We are reaping the rewards of the Trophy Proponents.

      Ever notice how the length of adolescence seems to be getting longer and longer? What is it now, age 26 (Thanks ObamneyCare)? And for some people, it’s perpetual adolescence with income level not necessarily an exclusion.

      The literal serial bastardization of the US (and Europe, with their Council House Chavs and Chavettes) had led to the en vougue mindset of “I deserve an equivalent and congruent outcome like my neighbor regardless of origin or life choices.”

      The simple logic is: “I performed A with the guaranteed expectation of B.” With no forethought or consideration that other static factors and random situations will invariably throw a wrenched monkey in that logic, and they expect others to rectify the situation and restore social harmony to equilibrium.

      1. WORKERS OF THE WORLD, UNITE! MOM’S OUT OF TOWN ON THURSDAY, SO WE CAN MAKE MAO POSTERS IN MY BASEMENT, AND THEN OFF TO WALL STREET

      2. It is amazing to see the difference of generations. At age 26, my old man – who dropped out of college – was a large grocery store manager, part of a chain of 30-40 stores.

        When I was 26, I was out of college with my CS degree and working a low-level computer support job.

        My younger cousin, who is 26-28 now – has a degree in library science, and is still ‘finding himself’ – working part-time.

        1. It’s hardly just that. I probably have a better job now than my parents did at 27 (because I’m not an idiot like your cousin), but they had already been married for 8 years at that point and were about to have their first kid (me?and yes, they’re still together). All this finding of oneself has led to huge delays on that front. Why should a guy think of himself as an adult if he’s still on mommy’s insurance until he’s 26, and probably living off her for even longer?

          1. “living off her” I assume you don’t mean still breastfeeding?

            1. cool, moms back from the game store with HALO 15!!!!

        2. When I was 26, I had been married for 7 years, had two kids, and was living in poverty while attending college (after losing my job about a year before).

          1. Blah blah blah. We get it. The younger generations are a bunch of fuck ups just freeloading because the greater generations gave them the prosperity to do so. Fuck that!

            If anything, all you older generations have given me is the opportunity to worry about taking care of you as you hit your twilight years because you weren’t smart enough to prepare for increased medical costs as you get older and retire. Leaving a fiscally destructive system of entitlements is hardly a gift to the younger generations and pretty much negates any positive contribution you’ve made.

            I’ll give you that my generation (I’m 26 now) has its fair share of fuck ups. But one can hardly classify an entire generation based on the actions of a few stupid individuals (whoever we’re railing against right now…I assume it’s the protestors?). I, however, can classify your generations based on the fact that you did nothing to prevent the generational theft schemes known as SS and Medicare.

            1. ahem, “Owebama”

              ‘your honor, the defense rests.’

              1. Are you fucking serious? How about FDR? LBJ? Any of the other morons who got us in this predicament decades ago. Hardly the fault of my generation. Obama is a moron – true. But the youth of your generation likely voted for just as big of idiots. If you really think that all of this country’s problems started with Obama, you need to wake the fuck up.

                1. You kids today with yer flappers and speakeasys…er wait you kids today and your buddy holly … er wait Elvis…er wait gangsta rap death metal… grunge…living at home at 26…

                  does it ever end. There are a lot of f’ups in the world. That hasn’t changed over time.

        3. Don’t get me started. I’m 26 and I’m at a level I should have been 3 or 4 years ago. This is with a concentrated effort to try and find good work and improve my condition. I have friends who are my age that live like they did 8 years ago. It’s fucking depressing when you think about it.

          1. To be fair, there have likely been extenuating circumstances which led to your not finding good work to improve your condition. Perhaps the recession has impacted you? And whose fault is the recession? Was it 23 year olds like you over leveraging themselves on houses they couldn’t afford? Doubtful.

      3. Basically, they’re dumbing down Real Life to make it more accessible to a wider, stupider audience.

        I blame consoles.

        1. Where is this dumbing down happening? I sure as hell haven’t seen it. If anything, the state of the world is requiring people to smarten the hell up. We live in a global information economy in which the only thing that matters is one’s ability to absorb and integrate new knowledge. Traditional skills and sector-based knowledge is becoming irrelevant. Hardly sounds like dumbing down to me.

    4. I’ve got a full body tattoo, two dozen facial piercings, and my hair is dyed neon green. I can’t get a job as a high paying stockbroker, therefore IT IS UNFAIR!

  4. But none of this says anything about what Cowen has dubbed the “personal well-being gap”?the only gap that matters. Indeed, this gap, which measures the difference between basic goods that average people and gazillionaires like Bill Gates can afford, has been steadily closing.

    One interesting thing to me is that the difference between being upper-middle-class and being lower-middle-class, in pure consumption terms, largely revolves around your expenditures for housing and education. (Education expenses for public schools being buried in the housing number.)

    Both upper middle class people and lower middle class people have cars, appliances, homes, leisure, etc. The upper middle class people just pay a premium to have all those things in certain geographic areas, where they live near each other and educate their children without lower middle class people or their children around.

    But that means that the difference in living standards boils down to the identity of your neighbors. The premium the upper middle class is paying goes towards making sure that poor people aren’t around.

    But that being the case, that means that the complaints of the lower middle class largely boil down to “I have to live near other people like me.” And the whole “maxim of your action” thing would seem to estopp that complaint. How can you complain about the proximity of people just like you?

    1. But that means that the difference in living standards boils down to the identity of your neighbors. The premium the upper middle class is paying goes towards making sure that poor people aren’t around.

      MY GOD FLUFFY! Are you seriously suggesting that people in a dynamic system self-order and self-segregate?

      I’m shocked, shocked I say!

      There oughta be a law…

    2. Nice post, Fluffy (as usual). This is a valuable point I don’t see made nearly enough.

      1. I also don’t see nearly enough references to estoppel.

        1. i missed the part about section 8…

          1. My wife and I gave up our home to get out of our ‘hood’. We call it “paying the Jamaal tax”, to get away from career thugs.

    3. You hit the nail mostly on the head, but you miss one thing, and that is investments. I can not prove, but I greatly suspect, that the upper middle class will likely remain in the upper middle class during their retirement years, while the lower middle class has a good chance of slipping into the upper lower class after they become economically unviable due to age.

      1. ^^^this. The OWS idiots fail to realize that it is much easier to grow wealth when you have some to begin with. Smart middle class investors will see their net wealth increase; those already affluent will only climb further up. People who make poor choices get what they get.

        1. choices, choices, choices.

          just look at the used car lots…filled with those Suburban Uber Vehicles. commercials about ditching time shares…gold buying stores renting space at malls – ‘leave with more cash than you came with’… Halloween isn’t over it’s time to be haunted by “The Return of the Poor Choice”.

  5. Income mobility is very important, but even more than that is the (increasing) standard of living.

    Being at the “poverty level” in the U.S. would make you very rich in most of the world.

    Attention, Protestors: You’re Probably Part of the 1%

    1. But the people in the rest of the world don’t count, because they’re brown and stuff. And they talk funny.

      1. and because, in america, poor is the new normal ! welcome to the NAFTA middle-class !

        1. and because, in america, poor is the new normal moar wingnutz LIEZ…whom the wingnutz have thrown under the bus while apologising for wallstreet execs herp derpity herp DERP!

          1. use ur name sarcasmic

      2. Hey, dumbshit… there are poor white people, too. Quit trying to make it a racial issue.

        1. Witez r poor cuz of choice

          Blakz r poor cuz racist witez

          1. Just when you think the stOOpid can’t top itself…

  6. “natural market forces ”

    Interesting. I thought that the libby position was that there were too many regulations to be able to characterize the existing market as a free and ‘natural’ functioning one. So which is it? Maybe, when it does what you want it to do, it’s ‘natural.’ When it doesn’t it’s, er, ‘unnatural,’ ‘fake,’ ‘constructed?’

    Natural. As if.

    1. Actually, you are quite right.

      We have a mixed economy that is warping economic outcomes profoundly, and that has severe effects on the overall justice of the system.

      But prior productivity gains for the last three centuries were so profound that the warping that we’re experiencing is for outcomes on top of a very high minimum.

      I would not voluntarily choose to be a lower middle class person working in a warehouse and living in Riverhead NY. But if my other choice was to be a Norman knight, I’d be driving down the LIE to start my new life in a heartbeat.

      1. But if my other choice was to be a Norman knight, I’d be driving down the LIE to start my new life in a heartbeat.

        Oh come on Fluffy, you can’t see the Anglophile romance in planting a claymore in Saxon skulls and laying siege to your enemies?

        I mean, forget the Plauge, lack of sanitation, rampant infection, general blight and other ills that remind one of modern day Detroit. IT sounds glorious in its simplicity.

        You, sir, have failed The Riddle of Steel.

        1. IT sounds glorious in its simplicity.

          As I love to point out to people who say life is hard,
          True, death is simple.

      2. So, you’re saying that in some alternate, perhaps parallel, universe, there exists the perfect outcome? That there exists (potentially and metaphysically) ‘the system as it is SUPPOSED to be?’

        1. …how does it work?

          1. u wouldnt know fool

            1. i know fool every time i look in the mirror WINGNUTZ [LIEZ]

              1. Needs more [BRACKETS], zeds, CAPS, and 7-year-old grammar and punctuation.

        2. Good point.

          Since nobody can point to a perfectly free market, that is proof that one can never exist.
          Not only that, but it is proof that one shouldn’t exist, because if it should exist then it would by now.

          I bet that in the 1860s you would say that the fact that the southern economy had never functioned without slaver was proof positive that it would never and could never function without slavery.

          Where is the example of a plantation economy without slaves? See? That’s proof it can’t exist!

          You’re sooooooooooo smaaaaaaaaaat!

          1. Not what I asked. I’m not at all saying that just because someone can’t point to the existence of something that it doesn’t exist. I think there are probably lots of things that exist that haven’t been objectively proven, yet. I just asked the question. Is the presumption here that it does exist somewhere in a perfect universe? I mean, this is the fundamental presumption of the argument that a ‘natural’ free market is a path to perfection, right?

            To be completely transparent, however, I don’t really get how the rationale is any different than the one used to prove the existence of god.

            1. herp derpity derp

              1. Well, just consider that the whole idea of ‘natural’ is constructed, as well. I make the point not to argue FOR government intervention, though. I just think the position that there is such a thing as a ‘natural’ market is untenable, when there’s not even such a thing as ‘natural.’ It may be that we need new language to discuss what exactly is required, or what might work better.

                1. The flaw in your logic, stephanie, is the use of the word “perfect”, AKA “The fallacy of ambiguity.” Define perfect.

                  “Natural” is a perfectly acceptable word, denoting “unfettered” and used deductively as “Argument from definition.”

            2. Markets are a human construction, so of course they can not be perfect.

              They are in fact imperfect, and that is a feature, not a bug.

              Profit and loss, without government intervention, is self correcting.
              Good ideas make money as they are chosen by consumers, bad ideas go away since they do not make money.

              Government fucks this all up by encouraging or discouraging consumer behavior, buy selective taxation and subsidization to interfere with natural profit and loss, and by creating barriers to enter the market which stifles competition.

              Markets result in ’emergent order’.

              It ain’t perfect, but it is a hell of a lot better than anything that can be designed from the top-down, because it allows for millions of ideas to be tried. Some succeed, most fail.
              That’s a hell of a lot better than a couple ideas being imposed by force, and all others rejected out of hand.

              1. Refute by real life example if you disagree.

                Or rage on with the typical.

                1. Yet another moron proves incapable of comprehending the concept of government existing for the purpose of enforcing property rights, enforcing contracts, enforcing criminal law, and otherwise leaving people the fuck alone to engage in capitalist free market economic activity.

                  limited government != no government

                  1. http://www.freerepublic.com/focus/fr/601586/posts
                    http://mises.org/media/3065/Th…..xsrc=audio

                    “limited government” does not exist now, it has never existed, and it will never exist. governments exist to increase their POWER over people. get it through that lead skull of yours.

              2. What makes the market system “perfect” is not how much we love the specific outcome, which we may hate, but rather the persons who should be responsible are actually held responsible for the outcomes, i.e. if an investment fails, the investor is on the hook for the loss and not someone else, e.g. the taxpayers.

            3. I see a lot of parallels between free market capitalism and evolution in nature. Constant competition between organisms where the strong and those who find their market niche survive and propogate and those who don’t disappear. The end result of a billion years of competition being a species capable of complex thought. Under true capitalism society will evolve for the better as evidenced by the more rapid rate of technology advancement under capitalistic systems.

              1. I see a lot of parallels between statism and creationism.

                Just as creationists cannot accept the idea that life can evolve without being directed by a higher power they call God, statists cannot accept the idea that society can evolve without being directed by a higher power they call the State.

        3. So, you’re saying that in some alternate, perhaps parallel, universe, there exists the perfect outcome?

          Uh, no. Where did you get that?

          1. The straw man said so.

            1. and i noes teh strawmen

      3. But if my other choice was to be a Norman knight,

        Two words: Prima. Nocta.

        1. Nice.

        2. Yea! Awesome! In an era with no dental care, makeup, er… grooming, deodorant, and, well, bathing is the DEVIL; you get to sleep with unwilling peasant chicks while they are still virgins. That should be fun.

    2. Good point.

      Either the market is completely free and natural, or there is nothing free and natural about it.

      No in between. None at all.

      It cannot be said that some aspects are more free than others, or that market forces can overcome government intervention.

      Nope. No in between at all.

      All or nuthin.

      You’re sooooooooo smaaaaaaaaaat.

      1. “No in between. None at all.”

        Slippery slope is slippery.

    3. It varies from industry to industry depending on how much the politicians have gotten involved in that industry.

  7. Unemployed Man and his sidekick Krug Man are unofficial superheroes of the occupy movement.

    Krugman, really, for reals. I believe a shark somewhere has been jumped, mightily.

    1. Quick cap l! To the KrugCave! There’s capitalism to crony and wealth to pilfer!

      Bwahahahahaha!

      1. Alright! You take this $trillion and give it to giant favored corporations, and I’ll start printing money.

        Where’s Shovel-Ready Man? We’ve got a money hole to dig!

        1. I’m here with my sidekick Broken Window Girl!

          1. Start digging. The working poor are going to love us!

          2. I LOL’D at this.

        2. Don’t be stingy with that printing! Greasing the palms of key politicians is very labour intensive work. We must spare no expense!

          Shovel-Ready Man is currently at an OccupyTentCity. We’ll have to pay him AND find a replacement! Hand over fist, I tells ya!

    2. Bruce Bartlett is not much better.

      1. He was on Bloomberg this morning, sniffing about how Republicans (and, apparently, only Republicans) are unacquainted with “facts.”

        I switched over to Alt Nation. I live in a heavily armed part of the country; you don’t wanna go road raging around here.

        1. Bruce Barlett is Tony?

  8. If statists are so concerned with income inequality, why don’t they band together to form businesses to pay their workers more. There are plenty of statists who hate capitalism or would like to reform it so that there is very little income inequality; many of these people are very rich, such as George Soros, Michael Moore, etc. Why don’t they do this?

    1. concerned with income equality – except they like it.

      1. Well, yeah. Shouldn’t different processes produce different results?

        1. how are libertarian statists, different from other statists?

    2. it’s HAAARRRDDD…

      it’s much easier to just demand an existing business to drive itself into bankruptcy trying to live up to the OWS ideal.

    3. “If statists are so concerned with income inequality…”

      Which they aren’t.

      They are concerned with gaining power over others and any excuse will do to further that end.

      1. …with gaining power over others and any excuse will do to further that end.

        Even poor talk articles on Reason.

        1. even a broken clock…

    4. If statists are so concerned with income inequality, why don’t they band together to form businesses to pay their workers more.

      There’s no point in doing something unless government force is involved, because if you fail then you really fail.

      If you get government involved, then if you fail you don’t really fail, because when government fails it can just use more force.

      1. when’s breakfast mommie ?

      2. But in this day and age, if you fail, the gov bails you out. So, it should be win-win.

    5. Re: Charlie,

      If statists are so concerned with income inequality, why don’t they band together to form businesses to pay their workers more.

      Business is yucky. They prefer the government do the thievering for them.

      Why don’t they do this?

      They’re hypocrites.

    6. Well naturally everyone should be paid equally, but some should be paid more equally than others since they ensure the equality of recompensation amongst all the equal people or some bullshit like that.

  9. Okay, but that ignores my question. Maybe someone honest will answer.

    1. I prefer to frame a question honestly first.

    2. The simple answer is: “They don’t want to.”

      Your suggestion of strict adherence to their purported statist ethos is anathema to their very human trait of “Me first. Then I’ll get to others.” The dissonance of the masses who espouse that statist line of thinking run from it as soon as they find out it implodes and self-preservation takes over, all the while telling themselves, “It’ll work next time,” not really grasping that is precisely how markets work. Or, more accurately, willfully disregarding that statist tropes of guaranteed outcome equalization fail in the long run.

      The super rich types you mentioned are simply colossally dishonest and have no qualms profiting from the suckers that bought into their tripe, relying on The Barnum Corollary and knowing that the tripe they’re selling doesn’t work.

      It’s a sickness. Really.

      1. I’ve also wondered if it’s sometimes a lack of imagination or a barely repressed fear of not being able to live up to their ideals. Or the third option – they just think capitalism is uncool so starting a business wouldn’t make them seem hip anymore.

        In the first case, I often meet people who are intelligent and imaginative but when it comes to political economics that’s when they simply become boring dullards (or worse, shrill, in-yo-face dullards). Any problem that comes along can be met with the magic wave of the legislative wand – ban it or tax it (whereas the libertarian option allows for millions of options that creative individuals could come up with through scientific or technological innovation or other means). Their reliance on coercion for everything doesn’t just offend me, it bores me to tears.

        In the second case, I think a lot of them are just fear driven. Looking for real solutions based on creative drive takes courage and they’re too afraid of failure.

        In the third case, many statists base their arguments on what their friends or colleagues think is hip. No amount of reason can appeal to them as their argument is not derived from reason but from wanting to be associated with the hipsters. Capitalism just isn’t cool. And who would want to risk losing their cool friends over it?

        1. I think a lot of them are just fear driven.

          All three scenarios can be Occam’ed to this nasty granddaddy of all four-letter profanities: Fear.

          Your scenarios are all rational, or irrational, depending on the context of the situation, responses to that fear. Those irrational fears, such as “Will I have enough stuff to fit in, look hip and find a mate,” to the more rational “Am I going to have enough to pay my bills, keep a roof over my head and eat,” are easily exploited by statist class hucksters promising that regardless of outcome, all will be well and fear will be assuaged.

          Reminds me of The Litany Against Fear; I need to re-read Dune again.

        2. Charlie,

          There is also a basic psychopathology at work. I have had a couple of dozen college age kids work for me over the years, and about 2/3 of them are very good workers, but I can’t imagine any of them starting a business. Entrepreneurship is simply not on their menu of life choices.

          And I think it’s the liberal cant that successful people are just lucky is to blame. They been told their whole lives that success can be achieved by effort, but that is mostly luck. And remote luck at that, a trait they don’t want to gamble on with their lives. We’ve bred risk/reward calculation out of the work force, and most people would rather coast than strive.

          As for businesses that treat their employees well, the far left usually hate them: listen to them slag Starbucks or Whole Foods sometimes.

          1. As for businesses that treat their employees well, the far left usually hate them: listen to them slag Starbucks or Whole Foods sometimes.

            Statist far right maggots hate them as well, Saccharin Man. Look also at Costco. Wall Street hates Costco, often referred to “The World’s Largest Co-op.” Costco treats its employees well, provides a distribution service that the market bears well, and flourishes. Compare Costco to say, Sam’s or one of the other bulk distribution businesses and they don’t compare in terms of price, service and predictability.

            Far right types are as bad as Far left maggots for precisely the reasons Fluffy stated earlier: the notion that unfettered capitalism will deliver goods and services and equalize the playing field better than concerted, top down diktat is also very unappealing to wealthy, patrician types. The thought here is upward mobility is good, but only for the right people.

            1. the “right people” include black immigrants from all over, Indians, Arabs, Eastern Europeans and many others who have come here and done very well. The opportunity to make money exists if you want it, or to make a living as a “conceptual artist” (I know an african woman who does that; naturally she is a deep leftist who would not even be allowed in all the places she thinks are better than here) or as a garbage collector or midwife or a million other things.

              Equality is just another word for confiscating other people’s property and doling it out on the basis of whom the government thinks “deserves” it.

              people like liberal talk. “I will take something from him, he’s bad, and give it to you.” People think they will get more for nothing. But there are not enough rich to take from. Such movements have to end in the destruction of the middle class and even the working class. Anyone who owns anything becomes the enemy (unless they are party members), as we saw with Mao and Pol Pot’s regimes.

              As Thomas Sowell ( a great man) said people who like capitalism don’t imagine it is completely fair. We think that communism is more unfair. It is not fair for one to own 10 billion like Soros. But when the state starts deciding what people should own, the system becomes more even more unfair.

      2. very human trait of “Me first”

        Humans evolved to be egalitarian; in fact, it is plausibly our most unique trait as a species.

        Our brains evolved to be large so they could process all the complex relationships of an egalitarian society.

        “Me first” is a cultural trait.

        1. Re: White Imbecile,

          Humans evolved to be egalitarian

          Let’s see how egalitarian humans are as they eat you in a cannibalistic frenzy while you cry like a little girl, if in your “original affluent society”, you wuss.

          Like a little girl.

    3. “…why don’t they band together to form businesses to pay their workers more.”
      _
      they have but teh [UNIONZ] & middle class have been steadly attacked for 2 decades by wingnutz haters.

      1. becuz i think the UNIONZ make a business MOAR successful! holy fuck im an idiot! derp!

        1. got it wrong again spoofer fool

      2. A union is not a business.

        1. the IRS says they are.

        2. But since you brought you up, a union should have enough money in trust to start a business/factories to produce their own goods. Rich anti-capitalists could also contribute.

          1. i agree w that charlie

        3. “A union is not a business.”

          moar wingnut LIEZ

          1. mom’s got breakfast ready so im taking a break fm my stupid

        4. A union is not a business.

          Sure it is. It can be hard to tell underneath the thick coating of government privilege and rent-seeking, but unions are in the business of extracting money from workers in return for threatening to destroy their employers.

          Its a weird business model, but what with all the government privilege and rentseeking, its been hugely successful. Your big unions have assets in the billions.

          1. Right, okay. But what I meant was that they aren’t a business in the same sense as a company that produces goods and services for the public. In any case, if the complaint of rich anti-capitalists is that a sneaker company such as Nike or an auto company like Ford do not pay their workers enough then the rich should be able to pool their money to start their own sneaker companies. The union at other companies could just tell their workers to quit because they would be starting their own companies/factories and would be offering better salaries for the workers.

      3. Re: Triple Asshole,

        they have but teh [UNIONZ]

        To do the thievering for them. Why work?

  10. White Indian|10.31.11 @ 8:16AM|#

    Anybody who has watched Trading Places knows Duke and Duke would never tolerate a Cain running the house.

    https://reason.com/archives/201…..nt_2601596

    WHAT ^^^PICTURE^^^ GOES UP THIS MORNING???

    Coincidence?

    We report, you decide.

    1. I run the whole damn thing here, in case you haven’t noticed.

      And yes, I’m petting a purring kitten on my lap while chuckling evilly.

  11. sarcasmic said: Markets are a human construction, so of course they can not be perfect. They are in fact imperfect, and that is a feature, not a bug.

    Any socialist could hold the same belief: Socialism is a human construction, so of course it can not be perfect. It are in fact imperfect, and that is a feature, not a bug.

    The bullshit here is so imperfect. But that’s a feature, not a bug, because it makes me laugh so hard.

    1. Asperger’s is a feature of yours, not a bug. Please post 100 more times here to prove my point.

    2. Re: White Imbecile,

      Any socialist could hold the same belief: Socialism is a human construction[…]

      It’s actually human folly.

  12. The article would mostly make sense on it’s own, but who picked this headline? Among wealthy market democracies, those nations with more equality almost always have the highest income mobility.

    1. Re: ttubkcid,

      Among wealthy market democracies, those nations with more equality almost always have the highest income mobility.

      This is obviously not true, considering the burden of taxation most income earners suffer in European countries – where “equality” is theoretically more prevalent than in the U.S. What creates income mobility is freedom, not equality.

      1. I can see how it could be true – if everyone’s income falls within a very narrow range, it doesn’t take much of a change to move between quintiles (or however you’re measuring it).

  13. “Personal well-being gap”

    Jesus tapdancing Christ, not *another* bullshit term…

  14. Surplus wealth, then, is driving the Occupy Wall Street movement as much as the alleged growth of income inequality.

    It’s surplus wealth that allows the OWS masters to feed them.

    1. (straining) “…must…stop…pizza…redistribution…to…OWS!”

  15. Another argument for inequality of wealth:

    1. Money is Energy. Assets, both liquid and illiquid, are representations of energy, specifically potential energy. Nobody complains that automotive employees unfairly control and consume more energy per employee than family lawyers. But if you think about it, executives and bankers and investors control more money because they are good at it (in an open and uncorrupted market), so why not let them do their jobs and allocate money where it belongs?

    2. Good Money People Should Have More Money. If they take risks with money and make good money decisions, they rightfully get paid well, and we all benefit (again in an open market). Just liek we all benefit by innovate allocation of energy to old and new devices to eb sold in open markets.

    3. Inequality Must Grow to Advance Everyone. The available energy is much higher per capita now, and it takes smart people to allocate 10 megawatts of power safely and efficently. Accordingly the available capital now is much higher per capita, but it must be earned from good labr, which necessarily starts from zero for inexperienced kids. Kids must show employers in their first job that they can show up for work on time, and do good work. Then to advance, they must learn fast, innovate, communicate, negotiate, and take responsiility for larger and larger work packages. This is the path to wealth, not just personally but for everyone you trade with in an open market, and ultimately everyone in the economy.

    Conclusion: It is inequality which creates the potential mental and physical energy to achieve things individually and collectively, so I want more of it.

    I wouldn’t mind seeing trillionaires in 2050 if it meant that 98% of the people of the world had heated homes, potable water, phones, and a job. It is the politics of kindergarten envy that is intellectually retarding our discourse.

    Without inequality we would have been extinct long ago.

    1. Very true, being poor now doesn’t exclude you from eating fruits and vegetables, items that only the rich could afford to eat sporadically even 150 years ago. Don’t often see the working man suffer from scurvy or other nutrient deficiency illnesses that were quite common for every but the rich not too long ago.

  16. I read Democracy Socialism and Capitalism last year. Found a paperback version in our now-closed Borders. He also predicted that at the time the move to socialism would be made we would have had zero interest rates for a time. He had the economic conditions down, all right. I think he underestimated our ability to see, and socialism’s real ability to generate, the visibly destructive effects we are all aware of, making the decision in favor of it less likely than he thought.

  17. I’m sorry – “well being” depends on “the difference between basic goods that average people and gazillionaires like Bill Gates can afford”? Is that supposed to be serious? I wish economists would stop abusing language like that: http://rustbeltphilosophy.blog…..ually.html

  18. “basically sensible life choices such as going to college, getting and staying married (preferably to a working spouse)”

    Bad assumption if there is a plan for offspring. The current lie that families need two incomes to survive works well for the folks who want the government to be even more involved in the raising of children.

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