Recovery Leaves 99 Percent Poorer


From D.C. to the Bastille, the masses have always shared one goal: getting out of paying back their student loans.

Emmanuel Saez, UC Berkeley's mustard-sweatered "guru of inequality," reveals [pdf] how poorly Americans in the much-discussed 99 Percent have been doing since the great Keynesian recovery began to sizzle in 2009:

In 2010, average real income per family grew by 2.3% (Table 1) but the gains were very uneven. Top 1% incomes grew by 11.6% while bottom 99% incomes grew only by 0.2%. Hence, the top 1% captured 93% of the income gains in the first year of recovery. Such an uneven recovery can help explain the recent public demonstrations against inequality. It is likely that this uneven recovery has continued in 2011 as the stock market has continued to recover. National Accounts statistics show that corporate profits and dividends distributed have grown strongly in 2011 while wage and salary accruals have only grown only modestly. Unemployment and non-employment have remained high in 2011.   

This suggests that the Great Recession will only depress top income shares temporarily and will not undo any of the dramatic increase in top income shares that has taken place since the 1970s. Indeed, excluding realized capital gains, the top decile share in 2010 is equal to 46.3%, higher than in 2007 (Figure 1).  

MacArthur genius Saez, who I'm sorry to find seems to have gotten attention from Reason only in the comments, is pecking away at the question of whether "falls in income concentration due to economic downturns" can be sustained. In English, that means that rich people lost much more than the rest of us in the 2007-2009 phase of the stagnation. If that trend could be sustained, Saez and other equalicists note, then the alleged growth of inequality might slow or reverse. 

This doesn't mean that the backward castes would get any richer, because in fact everybody is poorer. (Note that inflation means anybody who has seen 0.2 percent income growth since 2009 is already way behind.) It doesn't even mean that the noble goal of making everybody equally miserable would be achieved. But apparently the masses will feel better about skipping breakfast, lunch and dinner if they know that the rich had to order a slightly cheaper brunch. That's the theory anyway. 

NPR's Jason Goldstein explains why the dream of income equality proved fleeting

1. Over the long term, the top 1 percent have seen much larger gains than everyone else.

2. During the recession, the incomes of the top 1 percent fell more sharply than the incomes of everyone else. This happened because the stock market crashed, and the highest earners get a big chunk of income from investments.

3. In 2009-2010, when the market came back, incomes of the top 1 percent bounced back, while incomes for everyone else remained flat.

Note that the composition of the "1 percent" is not static because economic mobility (upward and downward) is in fact much greater than many equalicists (though not Saez himself) claim. Note also that "middle-class stagnation" has not actually been happening over the long term

Emmanuel Saez keeping the belfry bat-free.

Despite these seemingly mitigating trends, Saez views the struggle between kulak and bednyak through the lens of inevitable history.

"The recent dramatic rise in income inequality in the United States is well documented. But we know less about which groups are winners and which are losers," Saez writes. "I explore these questions with a uniquely long-term historical view that allows me to place current developments in deeper context than is typically the case."

AEI's James Pethokoukis takes Saez's numbers and spins out seven points. These are of varying significance, but one is pretty clear: President Obama and his economic brain trust have signally failed to deliver for the 99 Percent. Then again, only the 52.9 Percent voted for Obama, so what were the other 46.1 percent expecting? 

Pethokoukis talked to reason recently about why the economic recovery has been so anemic:

NEXT: Shikha Dalmia on the Failures of RomneyCare

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  1. Tim, where is the heroic photo? It gives sad libertarian laydeez like me some cheap thrills

    1. Libertarian lady? Is that why you’re invisible?

      1. Ha! Well played, sir

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      1. Don’t listen to him! We cannibals who prey upon swingers know how to make up our profiles just right to attract you suckers to our slaughterhouses.

  2. We’re beyond “G” already.

    1. Pre-Industrial Phase [c. 3,000,000 BC to 1765]

    A = Tool making begins (c. 3,000,000 BC)
    B = Fire use begins (c. 1,000,000 BC)
    C = Neolithic Agricultural Revolution (c. 8,000 BC)
    D = Watt’s steam engine, 1765

    2. Industrial Phase [1930 to 2025, estimated]

    E = Industrial Civilization is defined to begin in 1930 when the leading-edge value of energy-use per person reached 37% of its peak value.
    F = Peak of Industrial Civilization, c. 1978: confirmed by historic data published by BP, IEA, USCB, UN, etc.
    G = World average energy-use per person continues to fall, 1996
    H = Industrial Civilization is defined to end when energy-use per person shrinks to 37% of its peak value, forecast to occur by 2025. Life-expectancy (X) is estimated to be less than 100 years.

    1. HURR DURR

      1. It won’t be Just Like You Imagined.

    2. Keynesians perhaps need endless growth for their system to work, but capitalism does not need endless growth to survive, it needs things like freedom and property rights.

      1. Property rights are an abstract moral construct.

        1. Regarding property rights:

          ? Is any white person‘s right an individual or collective right?
          ? Is the right to take a negative or positive right?
          “[The Native Americans] didn’t have any rights to the land … Any white person who brought the element of civilization had the right to take over this continent.” ~Ayn Rand, US Military Academy at West Point, March 6, 1974

          1. What is a white person? I am color blind.

          2. Who gives a shit what Ayn Rand said ???

            1. Atlas Economic Research Foundation includes Reason Foundation as a member.

              And now you can own a special Reason Foundation Atlas Shrugged Part I Collector’s Edition on DVD.

              I love it when Fibertarians try to disown Rand. (or Rothbard, or any other of their fucking stupid founding personalities.) We all know that economic psychopathy Usually Begins with Ayn Rand.

              1. Rand didn’t have any babies to eat. She, herself, was a salty old broad.

                1. It is the act of unfocusing your mind and inducing an inner fog to escape the responsibility of judgment…

                  1. It is the act of unfocusing your mind and inducing an inner fog to escape the responsibility of judgment…

              2. Like I said, who gives a shit. Nobody here lives their life based on what Ayn Rand said, other than you perhaps.

                1. And the second time the cock crew. And NotSure called to mind the word that AynRand said unto him, Before the cock crow twice, thou shalt deny me thrice. And when he thought thereon, he wept.

         Ayn Rand & The World She Made
                  Special Edition Reason Atlas Shrugged DVD Now Available for Order!
                  What Would Ayn Rand Do?
                  All Your Atlas Shrugged, Part I Coverage Right Here!


                  1. It is the act of unfocusing your mind and inducing an inner fog to escape the responsibility of judgment…

          3. I ates me a nice little Native American baby for dinner last night. I love eating little babies.

            1. It is the act of unfocusing your mind and inducing an inner fog to escape the responsibility of judgment…

          4. It is the act of unfocusing your mind and inducing an inner fog to escape the responsibility of judgment…

      2. 1. Any agricultural city-Statist (civilization) society needs to constantly grow, or die. It’s simply a matter of the Prisoner’s Dilemma: Grow, or be absorbed by a competitor.

        2. Capitalism isn’t about freedom, it’s about starving people into submission to work for the controlling owner class. That’s why Gambol Lockdown is enforced, and the food is under lock and key. In a Non-State (free) society, there is a free lunch for the hunting and gathering.

        3. Any so-called “property right” that needs government to protect it is illegitimate, because it’s been taken by force, and is held by force.

        1. 2. Capitalism isn’t about freedom, it’s about starving people into submission to work for the controlling owner class.

          No, no no. It’s about fattening them up, so we can eat them, and their babies. Particularly, their babies.


          1. True, in an allegorical way. Why do you avoid personal responsibility for what you do?

            Pollution linked to birth defects
            BBC News

            Pollution: A life and death issue

            1. Birth defects add flavor.


            2. Do you have any babies I can eat? I might just eat you. Can I eat your penis? I get turned on by eating penis.


              1. It is the act of unfocusing your mind and inducing an inner fog to escape the responsibility of judgment…

            3. In my society all babies will be born healthy, also the number of deaths at birth will be very low, birth complications are the fault of civilization, this can be easily proven by the very high population numbers the hunter societies had.

            4. In my hunter society all babies survive birth, which is why the hunter societies had such huge population numbers, each family had 7 children on average all reaching ripe old age.

              1. “The earliest visible populations of prehistory nonetheless do surprisingly well if we compare them to the actual record of human history rather than to our romantic images of civilized progress.

                Health and the Rise of Civilization
                Mark Nathan Cohen
                Yale University Press

                1. Yes because as we all know, the populations of the hunters was much higher than it was now. Things like birth complications, no stress, these things never happened.

                  1. “More is better.” (If you’re trying to milk more wealth into higher, righter, and tighter hands from the serfs, yeah, that’s true.)

                    “The only thing that necessitates a large population is hierarchy itself. Hierarchy requires large pools of labor to provide for the nobility, and large populations that can be levied into large armies with which hierarchy can expand.

                    ~Jason Godesky
                    Thesis #11: Hierarchy is an unnecessary evil.

                    1. In my society we will have low population numbers, less is better babies dying at birth, it is all for the better for the survivors.

                      I am sure the majority support my views, my society does require that the worlds population needs to decrease by about 99% but who would not support such a wonderful and logical idea ?

                    2. If infant mortality is your measure, well…

                      Cuba beats American Capitalism.

                      Here’s a wrenching fact: If the U.S. had an infant mortality rate as good as Cuba’s, we would save an additional 2212 American babies a year. ~…..2kris.html

                      Got backpedal?

                    3. Cuba is so great, all those people risking their lives on makeshift boats to escape America to flee to Cuba prove my point !

                    4. Keep dodging and weaving, Fibertarian.

                    5. Yes lets all live like in Cuba, that great hunter gatherer society, which has incredible infant mortality rates, their government says so, so does Moore and the nytimes, it must be true. All those people fleeing the land are being lied to.

                    6. Keep dodging and weaving, Fibertarian.

                      If Moore and NY Times say it, it must be not true. Because that’s your wish.

                    7. If we had a newborn program like Cuba we’d have a much higher abortion rate of .7. So, no, there wouldn’t be an increase in children.

                    8. Behold the intellectual prowess of the fat kid in the Batman t-shirt.

    3. Apparently energy efficiency is a BAD thing. Who knew?

      1. 1908 Ford Model T – 25 MPG
        2008 EPA Average All Cars – 21 MPG

        who knew?

        1. I don’t think the Model T would meet today’s safety standards, or emission standards.

          What was that about thinking?

          1. In economics, the Jevons paradox (sometimes Jevons effect) is the proposition that technological progress that increases the efficiency with which a resource is used, tends to increase (rather than decrease) the rate of consumption of that resource.

            Jevons paradox

            1. You know what White Indian, you have me convinced. Your absolute irrefutable logic has shown me that I’ve been living my life all wrong. Plus, thinking is hard and I’m tired of it. I would love for someone else to do my thinking for me. Could you possibly lead me to a place where I can start learning the proper way to live my life? Is there perhaps a website that I might peruse that will give me a clear understanding of what I can do to change my life to live better?

              1. Forsake all your possessions, I can even help you there, give them to me and I will give you a spear to start hunting right away.

              2. And join the libertarian church.

                1. I’m so confused… I need help… seriously…

      2. Apparently energy efficiency is a BAD thing. Who knew?
        the correct answer to “who knew” is the political left, since everyone knows that efficiency of any type is unfair to the inefficient. Folks like this professor are fixated on the fantasy of equality of result, which is impossible in a free society.

        Hell, it’s even impossible in our society, which is far less free than it used to be. In my state, we have the latest govt-declared war on behavior:…..ill-mills. Good thing we have HIPPA (eye roll).

    4. Primitard-shouldn’t you be off somewhere masturbating furiously to “Last of the Dogmen”?

      1. It was like an act of hatred, like the cutting blow of a lash encircling her body: she felt his arms around her, she felt her legs pulled forward against him and her chest bent back under the pressure of his, his mouth on hers.

        1. What Rand describes there is an erotic scene between a man and a woman. Unlike you, however, I have the wherewithal to make that happen in my own life so there is no need for me to resort to masturbation.

          Sorry that not even the smelly hippie chicks that hang around the anthropology department will touch you.

  3. (Note that inflation means anybody who has seen 0.2 percent income growth since 2009 is already way behind.)

    True if inflation isn’t accounted for, except it is.

    In 2010, average real income per family grew by 2.3% (Table 1) but the gains were very uneven. Top 1% incomes grew by 11.6% while bottom 99% incomes grew only by 0.2%

    (emphasis added)


    2. The problem is that the “real” number uses the CPI, which has become a laughingstock.

      1. When facts disagree with your theory, blame the facts.

  4. In 2010, average real income per family grew by 2.3% (Table 1) but the gains were very uneven. Top 1% incomes grew by 11.6% while bottom 99% incomes grew only by 0.2%. Hence, the top 1% captured 93% of the income gains in the first year of recovery.

    Good thing Obama cares about the middle class and the poor, because that kind of thing will never happen under his watch.

  5. I think it’s really unfair that the 99% aren’t able to invest in the stock market.

    1. That’s not enough! SharesPost accounts for all!

    2. And especially not in oil stocks. It is really unfair how the oil companies make “Huge profits” but when I call a broker he won’t let me invest unless I’m a billionaire or a Saudi prince.

  6. hey, i AM the 1%. i am WAY better off financially. granted, we negotiated a sweet raise/benefits deal right before the shit hit the fan, but my income and benefits have soared since 2009. who woulda guessed? cops? WE ARE THE 1%!
    (or at least agencies that negotiated fat contracts BEFORE the shit collapsed)

  7. Concerns about inequality are an anachronistic relic of tribal societies.

    Everybody in the tribe has to be more or less on the same level? I’ve heard anthropologists explain that as a cross-cultural rationalization for cannibalism.

    A society devoted to equality of outcome necessarily limits the potential of every individual in that society. That’s all I need to know.

    I owe you nothing more than respect for your rights. And if I can achieve a better outcome than you, then maybe you should ask me for a job.

    Society will do better generally with that strategy rather than the one where we pay much attention to those who are goin’ around cryin’ about inequality, that’s for certain.

    1. Capitalists support equality you christfag, check out Soros, Buffet, Gates etc. they all support equality and are thus the richest men in the world.

      1. That’s not capitalism. That’s playing to the rabble.

        If Louis XVI had played it smart like Soros, Buffet and Gates, he might have kept his head on for a while longer.

        If I thought saying stupid shit in the press might help keep the rabble off my back, too? I might call up the NYT first thing to say something stupid–just as soon as I make my first billion.

        P.S. Soros survived the holocaust by hiding in plain sight. Coming out of that experience as a leftist very well may be a function of trauma for him.

        1. Fuck you bushpig and Rush lover.

          1. I don’t know if you’re shrike or spoofing shrike, but if you’re shrike, that’s not worth responding to, and if you’re spoofing shrike–what’s the point of that?

            It’s not just a question of how someone spoofs a name-calling blowhard; it’s a question of why. …why try to make shrike look like a name-calling blowhard? Doesn’t shrike do a good enough job of that already?

            P.S. Is being a leftist a function of trauma for you, too?

          2. Folks like Soros and Buffet are simply genuis, making a fortune off of government largess while maintaining unbridled support for “equality.” As much as I hate them for the ridiculous things they say and support, I can’t help but love them.

        2. True Believers are always in denial about the unintended consequences of their utopian ideologies.

          1. My point was that I don’t think Gates, Buffet or Soros are really true believers.

            Or were you talking about Louis XVI?

            1. Well, a Marxist (True Believer) of the Right.

              Like Marxism, libertarianism offers the fraudulent intellectual security of a complete a priori account of the political good without the effort of empirical investigation. Like Marxism, it aspires, overtly or covertly, to reduce social life to economics.

              The American Conservative — Marxism of the Right

        3. Soros survived the holocaust by hiding in plain sight.

          Hiding? Sheeit, that kapo couldn’t wait to help his nazi pals root out fellow Jews.

          1. Everything he’s done since then shows that he has no sympathies with the Nazis or the right whatsoever–to the contrary! He’s spent hundreds of millions fighting that sort of thing all over the world ever since.

            Oh, and just for the record, even if he was collaborating? I don’t know how to judge someone for doing what they needed to do to survive the holocaust. That’s basically blaming the victims!

            I don’t blame Jews for the holocaust. I blame the Nazis.

      2. Capitalists support equality you christfag, check out Soros, Buffet, Gates etc. they all support equality and are thus the richest men in the world.

        Let me know when the give away all of their wealth and income that exceeds the world average in both categories.

        Then I’ll beleive that they support equality. Until then, they’re just bullshit artists.

        1. of course, they are bullshit artists but they are playing to a media that long ago gave up its natural skepticism and curiosity. When some obscenely rich person is giving advice for how the rest of us ought to live, your antenna should go up as a reporter, as in “what’s his angle”.

          Gates has a foundation that gives him a nice write-off, Buffet talks of giving it away AFTER his death, and Soros is just a greedy bastard who is influencing the process.

          1. just askin’

            1. give me a couple of billion and a pliable media horde, and I will tell you.

    2. Egalitarianism is an integral part of human nature.

      Biological evidence: low sexual dimorphism (at the level of penguins.)

      Sorry, Ken, but you’re as full of shit as any other fundamentalist.

      Egalitarian societies built on sharing and cooperation and guided by consensus were much more adapted to the niche humans exploited than the hierarchical troops of other primates. This egalitarianism even became part of our very bodies ? humans have some of the lowest sexual dimorphism in the entire animal kingdom, on par with penguins. Compare this to, say, the baboon, where males may be up to three times the size of females.

      ~Jason Godesky
      Thesis #7: Humans are best adapted to band life.…..heses.html

      1. “See me quote myself! I am not really just another fat loser from Pittsburgh!”

      2. The fact that I have no friends, can’t get any women to have sex with me and generally am regarded as a complete failure in life by most that know me, does not imply I am not a great understander of human nature.

      3. Although humans have established many types of societies throughout history, anthropologists tend to classify different societies according to the degree to which different groups within a society have unequal access to advantages such as resources, prestige, or power. Virtually all societies have developed some degree of inequality among their people through the process of social stratification, the division of members of a society into levels with unequal wealth, prestige, or power. Sociologists place societies in three broad categories: pre-industrial, industrial, and postindustrial.….._societies

        Guess which ones tend to be less stratified? It gets more stratified, the more you move from pre-industrial to post-industrial, doesn’t it?

        Isn’t that why you want to go back to tribal societies?

        1. “[The Native Americans] didn’t have any rights to the land … Any white person who brought the element of civilization had the right to take over this continent.” ~Ayn Rand, US Military Academy at West Point, March 6, 1974

        2. Isn’t that why you like agricultural city-Statism?

          1. Michael Jackson earned more money than me, which implies he was my lord ???

            1. Money and wealth = sociopolitical power.

              And there are two classes. Haves. Have nots.

              Enforced by violence.

            2. he was your lord only if you had young boys.

              1. Evasive Fibertards bring up Michael Jackson. So Funny. They’re trying to avoid the reality:

                Who Rules America?

          2. I definitely think living in a post-industrial, technologically developed society gives us both more stratification and more opportunities to individuals, yes.

            I could go live in the mountains and build a cabin somewhere, but I like the opportunities our stratified society offers me, personally.

            …and the opportunities for female companionship are severely limited in the mountains. I’m just not a women-who-can-chop-wood kinda guy.

            1. Come to my dacha, comrade, more opportunities to individuals like yourself, da.

      4. You just agreed with Ken!

        1. You just agreed with Jason!

          1. The rebuttal to Ken saying that concerns for equality where tribal relics was to say he’s full of “shit” and quote someone saying tribal man was egalitarian.

            I don’t think that last part is actually true. Further, even if it is, I don’t think it’s desirable. Our “nature” can whither as far as I’m concerned.

            1. Premise Ten: The culture as a whole and most of its members are insane. The culture is driven by a death urge, an urge to destroy life.

              ~Derrick Jensen

              “The earth is not dying. It is being killed, and the people killing it have names and addresses.”

              ~Utah Phillips

              1. I’m hoping that death urge finally kills that equality one… soon.

            2. The cannibalism thing is true, too.

              If a warrior captures members of another tribe, and then takes the captives back to the village and enslaves them, then that means the owners of the slaves are elevated in a way.

              Tribal societies have dealt with that inequality in the past by consuming the slave after some period of time. That way the special status over the captive is shared equally by everyone in the tribe.

              People who support this or that tax policy based on who has how much are basically responding to the same impulse.

              It’s a very primitive impulse.

              1. You’re a consummate city-Statist, Ken. Keep parroting Statist bullshit, if you have to.

                “Arens (1979) has asserted, paralleling Godelier to some extent, that cannibalism as a cultural phenomenon is a fiction, invented and promoted by agencies of outside conquest.

                Future Primitive
                John Zerzan

                1. I’d be more interested in Arens had managed to prove, rather than merely assert.

                  1. Logic and reason are tools of the agricultural city-statists. Now give White Idiot your wampum.

                  2. “The science isn’t settled.”

                2. From Orlando Patterson’s “Freedom in the Making of Western Culture”, specifically regarding slavery as social death in primitive societies, and how the inequalities were resolved within tribes.


                  I’d recommend pages 13-14, but the whole chapter’s bang on! Hell, the whole book is awesome, as is his earlier book, “Slavery and Social Death”.

                  I don’t believe he’s a libertarian; I think he’s to the left. But he’s absolutely right about this stuff.

                  There’s plenty in there earlier in the chapter about how tribal societies were not individualist–he specifically calls them collectivist.

                  1. The good professor, like many, is overlooking the factor of domestication (proto-agriculture,) Ken.

                    “These foragers, whose main sustenance is fishing, have exhibited such alienated features as chiefs, hierarchy, warfare and slavery. But
                    almost always overlooked are their domesticated tobacco and domesticated dogs.”

                    ~John Zerzan
                    Future Primitive

                    “Domestication erects the rigid boundaries of surplus and private property, with concomitant possessiveness, enmity, and struggle for ownership.”

                    ~John Zerzan
                    On the Origins of War

                    1. If anybody erects rigid boundaries over my Hostess stash, I’ll cut and paste again!

                    2. Shorter Godefsky-“no true Scottish primitard…”

  8. Now thats what I am talking about dude, WOw.

  9. Glad to see that the new character limit has put a stop to pixelated diarrhea being splattered all over the comments.

    Good job, Reason!

    1. …in the free market of ideas?

  10. “But we know less about which groups are winners and which are losers,”

    The winners are the ones who work hard/smart at either providing a useful service to others OR at suckling the government teat. The losers are the ones who waste their time and energy on either doing nothing or on doing something relatively useless.

    There, now you know more about the winners and losers.

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