Income inequality

The Truth About Income Inequality

Should we be worried about the wealth amassed by the so-called 1 percent?

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"The issue of wealth and income inequality, to my mind, is the greatest moral issue of our time," said presidential candidate Sen. Bernie Sanders (I–Vt.). Former Secretary of Labor Robert Reich claims that "great wealth amassed at the top" will cause us to lose democracy. To fight economic inequality, presidential candidate Sen. Elizabeth Warren (D–Mass.) is calling for a 2 percent annual tax on household net worth between $50 million and $1 billion and a 3 percent tax on net worth above $1 billion.

Language like that and proposals like Warren's make increasing inequality sound like a crisis. But they misread the situation and misdiagnose the underlying problems.

On a global scale, inequality is declining. While it has increased within the United States, it has not grown nearly as much as people often claim. The American poor and middle class have been gaining ground, and the much-touted disappearance of the middle class has happened mainly because the ranks of the people above the middle class have swollen. And while substantially raising tax rates on higher-income people is often touted as a fix for inequality, it would probably hurt lower-income people as well as the wealthy. The same goes for a tax on wealth.

Most important: Not all income inequality is bad. Inequality emerges in more than one way, some of it justifiable, some of it not. Most of what is framed as a problem of inequality is better conceived as either a problem of poverty or a problem of unjustly acquired wealth.

Measuring Inequality

First, though, let's look at how much inequality there is. The Congressional Budget Office (CBO) produced a report in November 2018 on the growth of household income in each of five quintiles. Between 1979 and 2015, average real income for people in the top fifth of the population rose by 101 percent, while it rose for people in the bottom quintile by "only" 32 percent. For the middle three quintiles, average real income increased by 32 percent as well.

Or at least those are the numbers if you ignore the effects of taxes and direct government transfers. But you really shouldn't leave those out: If you're debating whether to increase taxes on the rich and transfers to the poor, it seems important to take into account the taxation and safety net already in place. Once the CBO researchers subtracted taxes and added welfare, Social Security, and so on, the picture changed dramatically for the lowest quintile: Income rose by 79 percent. (For the middle three quintiles, it increased by 46 percent. For the highest quintile, it went up by 103 percent—slightly more than before, probably thanks to Ronald Reagan's and George W. Bush's tax cuts.)

The above data on real income growth actually understate the growth of income for each quintile. When the CBO compares incomes over time, it measures inflation using the Consumer Price Index (CPI). But many economists have concluded that the CPI overstates inflation by not sufficiently adjusting for new products, improvements in quality, changes in the mix of goods and services purchased, and shifts in where consumers buy their goods. (The latter factor is sometimes called "the Walmart effect," but that term is arguably dated. Maybe we should call it "the Amazon effect" instead.)

Stanford economist Michael Boskin estimates that the CPI overstates inflation by 0.8 to 0.9 percentage points a year. That's small for any given year, but over time it doesn't just add up—it compounds up. If you go with the conservative estimate of 0.8 percentage points and adjust the CBO's after-tax, after-transfer data accordingly, the top quintile's average real income between 1979 and 2015 increased by 168 percent and the bottom quintile's average real income increased by 136 percent.

That's still an increase in income inequality, of course. But it's not an inequality increase in which the poor and near-poor are worse off. They're much better off. Everyone is.

And those numbers don't do complete justice to how much better off we are. Donald J. Boudreaux, an economist at George Mason University, has compared the prices of items you could have bought from a Sears catalog in 1975 with prices for similar items in 2006. He shows that with the average wage in 2006, you would have to spend far less time working to earn enough to buy the items than you would have had to spend in 1975. Moreover, he notes, the 2006 items are almost always of much higher quality. Who wants a 1975 TV? In 2010, my local Goodwill wouldn't even accept a working 1999 TV. And those awful primitive cellphones everyone had in 1975? Oh, wait.

I asked Boudreaux to update his data to 2019. Since 2013, he told me, the "time cost" of his chosen goods has fallen by another 30 percent.

I should note that while most consumer goods have been getting cheaper, education, housing, and health care have become more expensive. Interestingly, these are all areas in which governments have had a substantial influence on prices. In education, state and local governments have almost a monopoly; in housing, governments on the West Coast and in the Northeast have so restricted new construction that supply has not kept up with demand, causing prices to explode; and in health care, extensive regulation and subsidization have driven up the cost, though not always the price, of health care. (The difference is that the price to the consumer is often low because insurance and government subsidies hide the true cost, which is often high.)

On a global level, meanwhile, inequality is declining—and it's likely to fall further.

Economists measure inequality with something called the Gini coefficient. A coefficient of 100 would mean that one person gets all the income while everyone else gets nothing; a coefficient of zero would mean complete equality. In a 2015 study published by the Peterson Institute for International Economics, Tomas Hellebrandt of the Bank of England and Paolo Mauro of the International Monetary Fund tracked the global Gini coefficient from 2003 and 2013. During that time it fell from 69 to 65, thanks to rapid economic growth in lower-income countries—not just India and China but also sub-Saharan Africa. Hellebrandt and Mauro project that by 2035 it will have declined to 61.

What About Mobility?

Often when we look at income inequality, we do it by comparing income "quintiles." That is, we ask how much better or worse the richest fifth of the population did over a span of time vs. the second-richest, the middle, the second-poorest, and the poorest fifths. But it's important to keep in mind that there is substantial mobility from one quintile to another, even over just a few years. In a 2015 report for the Census Bureau, Carmen DeNavas-Walt and Bernadette D. Proctor concluded that "57.1 percent of households remained in the same income quintile between 2009 and 2012, while the remaining 42.9 percent of households experienced either an upward or [a] downward movement across the income distribution."

That's important to remember when considering the frequently stated worry that the middle class is disappearing. The middle class is getting smaller—but it's disappearing, for the most part, because it's moving up.

Now, it matters how we define the middle class. If the middle class is defined as the middle three income quintiles, then in 2018 it consisted of households with income between $25,600 and $130,000. In 1967, the middle three quintiles had income ranging from $19,726 to $54,596 (in 2018 dollars). The people in the middle, in other words, are considerably richer than their counterparts a half century ago.

Of course, defining the middle class that way means that exactly 60 percent of households will always qualify. That seems too broad. American Enterprise Institute economist Mark Perry, on his blog Carpe Diem, defines the middle class more narrowly to include any household with an income, in 2018 dollars, of between $35,000 and $100,000. In 1967, he notes, 54 percent of households were in that category; by 2018, that was down to 42 percent. That wasn't because they slipped; it was because they rose. In 1967, only 9.7 percent of U.S. households had income of $100,000 or more (in 2018 dollars). By 2018, that percentage had more than tripled to 30.4 percent.

And remember that this calculation adjusts for inflation using the CPI, and the CPI overstates inflation. So in some ways, the improvements are even greater than Perry's data suggest. On the other hand, the numbers arguably overstate the progress for people who live in coastal California, other urban parts of the West Coast, and the coastal northeastern United States, where the cost of housing has skyrocketed thanks to barriers erected by local and state governments.

On a related note: It's important to distinguish the concepts of inequality and poverty. The distinction seems obvious, yet even some economists confuse the two. In 2015, for example, University of Oregon economist Mark Thoma, author of the popular Economist's View blog, wrote: "Recent research…from UCLA's Fielding School of Public Health provides evidence that income inequality is associated with inequality in health. In particular, lower income is associated with 'high levels of stress, exhaustion, cardiovascular disease, lower life expectancy and obesity.'"

Notice that Thoma subtly jumps from "income inequality" to "lower income." Absolute real incomes certainly could be plausibly connected to health, but that's a separate question from how well off someone is relative to others. It's hard to believe that if group A's real income increases by a large percent but group B's income increases by an even larger percent, group A's health would worsen.

The 1 Percent

One reason so many people worry about income inequality is that they believe the share of income that accrues to the top 1 percent has increased dramatically. This became a hot issue during Bill Clinton's run for the presidency in 1992, and President Barack Obama harped on it repeatedly during his years in office. French economist Thomas Piketty's influential 2014 bestseller, Capital in the Twenty-First Century, also put a lot of emphasis on this assertion.

Piketty and the Berkeley economist Emmanuel Saez have estimated that, for the United States between 1979 and 2015, the top 1 percent's share of pretax income (including capital gains) increased from 9.0 percent to 20.3 percent. But in a 2018 paper, economists Gerald Auten of the U.S. Treasury Department and David Splinter of the congressional Joint Committee on Taxation came to a very different conclusion. To get a better measure of income, they accounted for all of national income, including unreported income, retirement income missing from tax returns, and income due to changes in the tax base that resulted from the Tax Reform Act of 1986. Their conclusion: Between 1979 and 2015, the share of pretax income going to the top 1 percent rose from 9.5 percent to 14.2 percent, and the share of after-tax, after-transfer income rose even less, from 7.2 percent to 8.5 percent.

Who's right? Piketty and Saez have moved in Auten and Splinter's direction with a more complete accounting for income. Their new approach found that the top 1 percent's share rose from 9.1 percent in 1979 to 15.7 percent in 2014. Half of the remaining difference between Piketty/Saez and Auten/Splinter is due to how the pairs handle underreported business income. Piketty and Saez assume that underreported income is proportional to reported business income, whereas Auten and Splinter assume that lower-income business owners disproportionately underreport. Auten has been at Treasury since 1987, which makes me inclined to trust his instincts here, but you can decide for yourself.

In any case, one thing that is clear from the data is that the higher your income, the higher the percent of your income you pay to Washington. In 2015, according to a recent study from the Tax Foundation, people in the lowest quintile paid 1.5 percent of their income in federal taxes, on average; the second quintile paid 9.2 percent; the middle quintile, 14.0 percent; the fourth quintile, 17.9 percent; and the highest quintile, 26.7 percent. Those in the top 1 percent paid a whopping 33.3 percent. This includes all federal taxes: income taxes, taxes for Social Security and Medicare, corporate income taxes, and excise taxes.

That means that whenever there is a large federal tax cut, those in the top quintile will almost certainly get a much bigger benefit, both in dollars and as a percentage of their income, than other quintiles. This is especially true when most or all of the cut is in the individual income tax, because that tax is disproportionately paid by higher-income people. But do they get a bigger cut as a percentage of their federal tax burden? For the George W. Bush 2001, 2002, and 2003 tax cuts and the Donald Trump 2017 tax cuts, the answer has been no.

Because of Bush's tax cuts, people in the second-lowest quintile in 2004 saw a 17.6 percent cut in their income taxes, the biggest percentage tax cut of any quintile. The middle quintile's cut was 12.6 percent, the second-highest quintile's cut was 9.9 percent, and the highest quintile's cut was slightly more than 11 percent.

Similarly, the 2017 Trump cuts reduced taxes most, percentage-wise, for the second-lowest quintile, cutting their taxes by 10.3 percent. The middle quintile got an 8.7 percent cut; the second-highest quintile, a 7.5 percent cut; the top quintile, a 6.7 percent cut; and the top 1 percent, a 4.6 percent cut. The lowest quintile had its taxes cut by 7.3 percent—it's hard to cut taxes for a quintile whose members mostly don't pay them.

Many people who worry about income inequality want to tax higher-income people more. Given what economists know about the harmful effects from raising already high marginal tax rates even higher, tax increases could certainly reduce measured inequality—because they would cause higher-income people to reduce their taxable income by working less, by taking more pay in the form of untaxed fringe benefits, or by investing more in municipal bonds, whose interest is not taxable by the feds. Of course, none of this would make lower-income people better off. Indeed, to the extent that higher taxes discourage capital accumulation, they slow the growth of worker productivity. One of the main ways to increase worker productivity is to increase the amount of capital per worker. With a slower growth rate of capital, worker productivity will grow more slowly—and so will real wages. This makes lower-income people worse off than they would have been.

Piketty recognizes that higher tax rates won't yield much additional tax revenue. In his 2014 magnum opus, he wrote that when a government "taxes a certain level of income or inheritance at a rate of 70 or 80 percent, the primary goal is obviously not to raise additional revenue (because these high brackets never yield much)." Instead, he argued, the goal is to "put an end to such incomes and large estates."

Because of limited space, I have focused on income inequality rather than wealth inequality. I will point out, though, that a tax on wealth—proposed both by Piketty and by Warren—would reduce the incentive to invest in capital, decreasing worker productivity and, therefore, workers' wages.

Two Kinds of Inequality

When is a growth in inequality justified, and when is it not? Consider two opposite cases: an innovator and a seeker of privilege.

In 1949, Robert McCulloch introduced the 3-25, a one-man chainsaw weighing only 25 pounds. This revolutionized forestry. A friend of mine, now in his late 80s, told me that when he was a teenager, his father made him cut wood for a whole winter of heating a large house. When my friend found out about the 3-25, he used his own allowance to buy one. It changed his life.

McCulloch made a lot of money with his chainsaw. But everyone who bought a 3-25 wanted it. It's likely that almost all of them got a large benefit from the purchase. McCulloch got richer, and so did his customers, who were able to save huge amounts of time and effort. Eventually, competitors produced their own chainsaws to compete with McCulloch's—products that were better, cheaper, or both.

That increased the benefits to consumers while reducing the profits to McCulloch. Still, he made a lot—enough that his innovation almost certainly increased income inequality, by raising McCulloch's income far above most other people's.

Now consider a story in which someone used political power to make himself and his wife very wealthy. In 1942, a young congressman from Texas had a net worth of approximately zero. But by 1963, when he became president of the United States, Lyndon Johnson and his wife had a net worth of about $20 million, a large part of which could be attributed to a license from the Federal Communications Commission (FCC) to operate the radio station KTBC in Austin, Texas.

During the 1964 presidential campaign, Johnson claimed that his wife had turned an asset she bought for $17,500 into a property worth millions by working hard. Not quite. Lyndon had worked hard—at using his political influence as a congressman. Before his wife acquired it, KTBC's owners had spent years trying to get the FCC's permission to sell the station. On January 3, 1943, Lady Bird Johnson filed her application to buy it, and just 24 days later, the owners were suddenly allowed to sell. That June, the future first lady applied for permission to operate for more hours a day and at a much better part of the AM band. She received permission a month later.

While all this was happening, the FCC was under attack by a powerful congressman, Eugene Cox, who wanted to cut the FCC's budget to zero. Lyndon Johnson strategized secretly with an FCC official named Red James and used his influence with House Speaker Sam Rayburn to deflect the attack. James later admitted that he had recommended to Lady Bird that she apply for the license.

Over the subsequent decades, the FCC didn't just clear an easy path when her radio station (and, later, a television station as well) needed an application approved. When a competitor wanted to make a move, the agency would put regulatory barriers in its way. In this manner, Lady Bird's company came to dominate Austin broadcasting.

So here we have two examples of income and wealth inequality increasing. In the first case, inequality increased because a man's company introduced a product that made the lives of those who bought it substantially better, raising their real incomes. In the second case, inequality increased because a politician used his influence to get monopolistic privileges from a federal agency, making the politician wealthier and lowering the real incomes of people in the Austin area.

There are at least two reasons to think differently about these two cases. The first is that McCulloch's actions improved others' well-being in addition to his own, while the Johnsons' actions benefited themselves at the expense of others. The second is why McCulloch's actions had those benevolent social effects and Johnson's didn't. McCulloch's wealth—and the benefits to his customers—were rooted in voluntary transactions in the marketplace. The Johnsons' wealth was rooted in raw political power.

There is a third possible source of wealth for the very rich: inheritance. Some people inherit wealth from fortunes like McCulloch's, and some inherit it from fortunes like the Johnsons'. The important question, as far as I'm concerned, is how the money is initially acquired. But in any event, the long-term importance of inheritance in American inequality is overstated. In the May 2013 American Economic Review, Steven Kaplan of the University of Chicago and Joshua Rauh of Stanford analyzed the fortunes of the superwealthy. They found that only 32 percent of people on the Forbes 400 list in 2011 had come from very rich families—down from 60 percent in 1982. Moreover, 69 percent of the 400 had started their own business. In short, a majority of those who made fortunes made fortunes. Maybe they made it the McCulloch way, maybe they made it the Johnson way, or maybe it was a mix. But they didn't simply rely on their parents.

The Real Problem Isn't Inequality

The word inequality sparks thoughts of the very rich and the very poor. But data on the degree of inequality tell us nothing about the degree of poverty or the lives of the poor. Inequality can grow even while the poor and almost everyone else are becoming better off. Indeed, in the last half-century, while U.S. income inequality grew, the poor and the middle class became substantially better off. And the even better news is that global income inequality has fallen and is likely to fall even further.

Great wealth, meanwhile, is a problem only to the extent that it is unjustly extracted. Government favoritism to politically powerful people may increase income and wealth inequality, as it did in the case of Lyndon Johnson and his wife. But it is the government favoritism, not inequality per se, that is the true problem.

The Important Role of Work

Many people, including many economists, who worry about income inequality overlook the role of work. You might imagine that the rich are generally idle while the poor work their fingers to the bone. But that's not the full picture.

The Department of Commerce's Census Bureau gathers data annually on characteristics of the five income quintiles. One thing that changes very little from year to year is the number of workers per household.

The data for 2018 are no exception. Each quintile that year was made up of 25.7 million households. For the lowest quintile, 16.2 million households had no one working at all during 2018. For the highest quintile, by contrast, only 1.1 million households had no one working. How many households in the bottom quintile had two earners? Only 1.1 million, or 4.3 percent of the total number of households. For the top quintile, 14.1 million households, or 54.7 percent of the total, had two earners. Not surprisingly, therefore, the average number of workers per household in the bottom quintile was 0.4, while the average number for households in the top quintile was 2.1.

The lesson seems clear for people who want to avoid being in the bottom quintile: Try your hardest to get a job year-round. Fortunately, that is relatively easy in the current economy, with its less than 4 percent unemployment rate. To further improve your chances, get married to—or just live with—someone else who works year-round as well.

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  1. To fight economic inequality, presidential candidate Sen. Elizabeth Warren (D–Mass.) is calling for a 2 percent annual tax on household net worth between $50 million and $1 billion and a 3 percent tax on net worth above $1 billion.

    I don’t think so. Warren is a thief and “fighting economic inequality” is simply a justification for her thievery. Whipping up hatred for the other is a common political tactic and the other in this case is the evil rich. While this is simple socialist philosophy – the fixed pie, the collective ownership, the fair share – I’m not convinced Warren is even a socialist so much as an opportunist.

    She’s the smartest person in the world and knows exactly how the world should be ordered but she needs money to operate her benevolent dictatorship and socialism gives her a convenient rationalization for her authoritarianism. I suspect she’s really no more socialist than Stalin or Hitler, just spouting whatever it takes to make sure she’s the one in charge of the death camps. And there will be death camps, that’s the real sine qua non of this whole exercise. We all know the “you have to break some eggs to make an omelet” is bullshit, there’s no intent to make an omelet, the intent is to break eggs.

    1. That makes me think of a quite from Will Smith that got him into a lot of trouble, but I think there was some wisdom in it.

      “Even Hitler didn’t wake up going, ‘Let me do the most evil thing I can do today.’ I think he woke up in the morning and using a twisted, backwards logic, he set out to do what he thought was ‘good.’”

      Boy did he catch some shit for that. But I think he was spot on.

      1. *quote* stupid autocorrect

      2. Even the worst villain is the hero of the story in his head.

      3. Read any modern Superman comic. Lex Luthor believes himself to be the hero, going to any lengths to protect the world from the alien Superman.

      4. Knowing Hitler’s interest in the occult, I’m not so sure about that. He might have been self-consciously evil.

        1. Both Saddam and that guy in Libya were gobsmacked that their people revolted. They thought they were the good guys.

          1. Narcissistic sociopaths always do.

            1. You mean I’m not the good guy?

      5. “The trouble with Eichmann was precisely that so many were like him, and that the many were neither perverted nor sadistic, that they were, and still are, terribly and terrifyingly normal. From the viewpoint of our legal institutions and of our moral standards of judgment, this normality was much more terrifying than all the atrocities put together.”
        ― Hannah Arendt, Eichmann in Jerusalem: A Report on the Banality of Evil

        To read that book was life changing for me. I do not want to read it again. She had insights into the minds of monsters I just don’t want to deal with again.

  2. I will believe Bernie is concerned about income inequality when he donates all of his wealth outside of one house and one car to charity, and continually donates all of his income over the median to charity.
    Until then, he is just a hustler and a leech.

    1. Bernie has made incredible sacrifices to get his modest wealth. You think it’s easy to never hold a real job, spend all your time telling everyone else what they are doing wrong, never having the opportunity to do anything yourself?

    2. He’s like Michael Moore. He’s been an incredibly successful free-market capitalist by taking advantage of gullible socialists.

      1. Well, there’s a product, *socialist bullshit*, and people with money who want it. Free markets, invisible hand, etc., etc.

  3. As a Koch / Reason libertarian, the only disagreements I have with my progressive Democratic friends are on economic issues. Especially income inequality.

    I actually think massive concentration of wealth at the very top is a good thing. I want people who already have tens of billions of dollars — like Reason.com’s benefactor Charles Koch — to rapidly accumulate even more wealth. That’s partly why I oppose Drumpf so vigorously. His high-tariff / low-immigration policies have been disastrous for billionaires.

    #OpenBorders
    #BillionairesKnowBest

  4. “To further improve your chances, get married to—or just live with—someone else who works year-round as well.”

    Until she moves in with someone else and uses the courts to rape your assets and your paycheck.

    1. You can’t trust women. But you CAN trust a small cabal of 2 dozen multibillionaires who control literally every single shred of information, media, entertainment, and technology you consume. Yessiree! Free minds baby!

      1. That “cabal” that provides goods, services and jobs without force or coercion? Yes. I trust them more than women or government.

    2. Or, live with a woman who has a couple of some other man’s kids, lives in a Section 8 apartment, has a SNAP card, WIC and pantry food in the kitchen, a free government phone, etc. Deal a little meth or heroin for pocket money.

      1. I’d rather live by myself with my almost-fourth-quintile salary.

        1. Millions of men in this country have chosen the option I stated. Based on what I’ve observed (there’s obviously no stats on this) I’d say it’s rare for a woman in subsidized housing to NOT have a live-in boyfriend.

          1. Oh I’ve seen it. It’s not a lifestyle I would choose.

  5. The stats are clear, but it probably doesn’t matter.

    People will always be envious of rich people, and they will always try to mask that envy as some kind of “concern for the poor.”

    1. Envy is quite a useless emotion.

      1. Jesus Christ! Envy is one of the seven deadly sins.

    2. I recall some poll, I think it was in the UK, where a lot of people said they wanted to tax the rich more, even if it failed to increase government revenue.

      1. When everyone who has money didn’t earn it, they stole it (cite: AOC), then taking it from them is right, moral, and just. It has nothing to do with government coffers.

      2. Obama said this in regard to the capital gains tax (paraphrased below).
        Question: Would you favor increasing the capital gains tax rate even if it didn’t increase revenues?
        Obama: Yes, because sometimes I think you need to spread the wealth around.

        Note that if it is now increasing revenues, the rate increase would not “spread the wealth around,” it would only reduce the net gains of those selling assets. Unfortunately, the interviewer never followed up with a question along this line.

        1. *Now = not

      3. A recent UK poll of members of ‘the demographic’ (the desirable one, 18-35) showed 60% wanted to live in a world free of chemicals, too.

    3. The stats are completely bogus. THAT is why people look askance at it. Because actual people (esp those who experienced ‘lower end’ at some point in their own past) have memories (micro and anecdotal) that render macro-level stats unbelievable.

      This entire article’s stats (and the entire discipline of economics now) are based on an assumption that the measures of inflation over time are either accurate or reasonably so within a range you can argue about.

      If those measures of inflation are utter crap, then so are all the long-term measurements that compound those errors

      The easiest way to see what crap they are – and what the effects of it compounding over time is – is housing.

      Believe the CPI is reasonably accurate and one can make some BS assertion like ‘one could live in 1960’s style for 20-25% of a year’s work now’. Believe that CPI OVERSTATES inflation (which is the default ‘argument’ within economics) and one can make the argument ‘one could live in 1960’s style for 15-20% of a year’s work now’. Everyone is getting rich. Only a complete moron or a socialist (which is the same thing) could disagree.

      Head over to buy or rent an actual house – like an actual fucking unfurnished house from the 1960’s or 1950’s – the IDENTICAL thing that someone back then might have lived in – and hey presto. It’s gonna likely cost 25-35% of a year’s work now. For the shelter alone. Forget the food, car, furnishings, utilities, etc. Just the house – and 50 year old relic of a house at that not a ‘nearly new house’ as it was then.

      IOW – the real world as it exists and is obvious to everybody except economists conflicts with the economists assertions about historical FACT. And economists want to be believed about the present or future?

      1. Yep. The CPI grossly understates the rising cost of living for those who actually have to spend all of their income to survive. And the single-income lower-middle-class households of the 50s and 60s are mostly a thing of the past now—today it takes multiple incomes to pay for that basic but decent household.

        1. Decent by what standard? Live on a 50’s standard of living in today’s salary and you’ll be putting a lot of money in the bank. Granted that means no internet, smart phone, home computer, flat screen with more than three stations, not to mention things that were luxuries like air conditioning.

          A higher standard of living costs money.

          1. And compare the average house size from 1950 to the average from today. That extra 1000 sq. ft. costs money. Who knew?

            1. Cars cost a lot more than they used to, but then, if, IF your car turned over the 100,000 mile mark, you’d stop and take a picture. IF you could afford a camera.

              Consumer goods are much, much BETTER than they were, in terms of quality, unanticipated functionality and cost. And for every “too high priced!” house, there’s an owner who has become correspondingly wealthy merely by making house payments for a couple of decades.

              As young Dr. Fronk-n-steen might have said: “The CPI…is…DOODOO!!”

              1. “BACK then” not “but then”. derp.

        2. Yeah – didn’t even think of that multiple income v ‘the Cleavers’.

          Inflation measures completely ignore/distort assets. And economists are either oblivious to that – or positively corrupted. And the odds are on ‘corrupted’ the second an economist flits from a statement about ‘wealth’ to stats based on ‘income’. Housing is an asset for homeowners. It is not for renters or the young. It makes no sense whatsoever to try to put those two in the same ‘market basket’ and pretend their pure ‘shelter cost’ remains a constant % of income over time.

          Likewise for long-term savings – purchasing $1 of income via a purchase of an asset now. It used to cost about $20-$30 (depending on the short-term business cycle) to purchase $1 of dividend income. Now it costs more than $50 to purchase that same $1. The last time it cost $30 was at the height of the panic in 2008 – in the early 1930’s panic, that same $1 would have cost $10. So much for the ‘ease’ of saving or preparing for future uncertainties. The sort of stuff that is the ONLY activity which can help avert the need for public ‘safety nets’. But which is what gets inflated out of reach for precisely those who need that safety net.

          We’ve created a mental model where those who already have assets (which basically means the wealthy, the old, or corporations) can extract more economic rent from those who have none (mostly the poor and the young). That mental model is why our economy is moving from one asset bubble to another and why it has become ‘financialized’ rather than ‘Main Street’. It is yet one more curse of the neoclassical/marginalist model of economics.

          1. Everything is so terrible and unfair.

          2. “The sort of stuff that is the ONLY activity which can help avert the need for public ‘safety nets’. But which is what gets inflated out of reach for precisely those who need that safety net.”

            That’s a great point! Do you know where I can find some of those figures?

      2. Very good points.

        The CPI and PPI also don’t correct for the longevity of durable goods. Neither does Boudreaux’s ‘Sears index,’ which he summarized here:

        centerforindividualism.org/we-can-all-buy-much-more-with-our-earned-incomes-than-ever-before-the-myth-of-american-middle-class-stagnation/

        Half of the 1975 cost of the items he chose to highlight belongs to a category that’s seen a 50-80% reduction in longevity:

        recraigslist.com/2015/10/23/they-used-to-last-50-years/

        Also notice that five of his seven examples were new to most households in 1975 (microwaves, dishwashers and washers/dryers) or newely popular (jeans and exercycles).

        Early adopters paying a higher share of a new product’s start-up/tool-up/branding costs is not the same as the chronically high labor and material costs that drive inflation.

        He also blames wage stagnation on an influx of new female and immigrant workers, but US Census data show that male wages have been stagnant regardless of any changes in workplace gender ratios:

        gailtheactuary.files.wordpress.com/2012/09/us-median-wages-male-female.png

      3. Texas stats
        1.16M food service workers make median $11.47/hr
        1.20M sales related workers make median $20.00/hr
        1.9M Office workers make median $18.00/hr
        .6M construction workers make median $21.00/hr

        for all employed, 12M, the median wage is $17.84/hr

        average 2 bedroom apt $1400/ month and went up 3% in 2019.

        so a construction worker getting 40 hours a week earns $840/week of which he is taxed. so about 1/2 of his wages go to housing if he has a wife and 2 kids.

        so what is required in 2020 that wasn’t in 1950. well for one it now takes 2 incomes to afford a family. see wage v. rent above.
        you also need 2 working cars with insurance(mandatory). You may have to drive up to an hour each way to sync up affordable housing and employment.
        you need a cell phone, computer , internet. In 2020 to move beyond that median income you need a college education (min $14,000/year borrowed and that cost has consistently beat inflation).

        I would guess maybe 1/3 to 1/2 of Texans make close to median wage of $17.84/hour. about 10- 12M people who haven’t seen a raise in 25 years.

  6. Globalization: earning that might have gone to domestic workers is going to foreign workers due to offshoring (for example production and service activities in other countries).
    More automation means more share of income attributed to capital.
    Never in American history has the debate over income inequality so dominated the public square, with Democratic presidential candidates and congressional leaders calling for massive tax increases and federal expenditures to redistribute the nation’s income.

    1. “ Globalization: earning that might have gone to domestic workers is going to foreign workers due to offshoring (for example production and service activities in other countries).”

      You think people in the US would be better off if we were still making shoes and shirts? There is only one domestic company that still makes shoes, and even with all their rent seeking New Balance is still overpriced crap. It’s called ‘comparative advantage.’ They teach it in Econ 101. I encourage you to learn something.

      1. “…I encourage you to learn something.”

        But that would mean GK would have to give up the adolescent whining…

        1. Coming from a retired boomer who spends half of his life on here mindlessly shouting epithets at anyone who disagrees with him and offering nothing of substance, this is a funny as all fucking hell. At least you’ll be dead from the metabolic syndrome complications soon.

          1. “Coming from a retired boomer who spends half of his life on here mindlessly shouting epithets at anyone who disagrees with him and offering nothing of substance, this is a funny as all fucking hell. At least you’ll be dead from the metabolic syndrome complications soon.”

            Got called on your bullshit, did you? Keep whining; it’s amusing.

          2. I don’t believe he’s a “retired boomer”. I think we’re being trolled by a precocious middle schooler.

            1. I believe, as you admitted below, you’re full of shit.

      2. They teach it in Econ 101

        If that hadn’t been the terminal level of your education you might have been exposed to advanced models of international trade, the intricacies of tariffs, subsidies, dumping, intellectual property, corporate espionage, and a million other variables that introduce complications to your pinmakers and brewers level of comprehension. But nothing breeds your level of astronomical arrogance like your level of astronomical ignorance.

        1. So you don’t know what comparative advantage means and don’t want to learn. Oh well. Just makes you look like an ignorant asshole.

        2. Without going to Google or Wiki or any other online source, tell us about just one advanced model of international trade.

        3. “But nothing breeds your level of astronomical arrogance like your level of astronomical ignorance.”

          How long did it take you to cone up with that one. Or did you steal it. Probably stole it but I’m too lazy to search for it.

          Thing is, fancy economic models don’t refute basic economic laws like supply and demand or comparative advantage. They build upon them.

          An axiom of science is that the simplest explanation is likely the best. People who unnecessarily complicate things are likely trying to obscure the truth.

          1. “Only time will tell if we stand the test of time”.

            Some quotes just ain’t worth stealin’.

        4. Never fails: when a leftard doesn’t know what he’s talking about, he just ladles out the contempt. It’s so much easier than trying to rent a clue and make a cogent point.

          -jcr

      3. New Balance is still overpriced crap.

        Well I for one find it one of the only shoes I can buy now. Because it is actually designed around the American foot (esp width). Which is not at all the same as either a)the Chinese foot or b)the ‘global’ foot. The only saving grace is that workplaces went to ‘business casual’ which means casual footwear. Which means you don’t need to replace far more expensive dress shoes with what would have likely become custom-made shoes cuz the dress shoes from wherever would have become as ill-fitting as every other shoe. Same with dress shirts and suits for me which now almost can’t be tweaked off the shelf.

        It’s called ‘comparative advantage.’

        No it’s not. Virtually all trade that the US engages in is ABSOLUTE advantage. Not comparative advantage. It is business school bullshit that tries to create the term ‘competitive advantage’ which then gets conflated with ‘comparative advantage’ by the linguistically lazy.

        1. Sorry your feet suck. I didn’t take business so I won’t engage in this semantic bullshit.

          1. It’s not semantics.

            Absolute advantage (what Adam Smith talked about) is trade based purely on price. If China makes most everything cheaper than we do, then all the trade runs one-way and we run huge structural deficits. Like real life.

            Comparative advantage (what Ricardo talked about) is trade based on relative factor scarcity. It’s counterintuitive. If China has relative surplus of labor and we have relative surplus of capital/land, then they sell us labor intensive stuff and we sell them capital/land intensive stuff. But over time the goods/services trade balances out because otherwise exchange rates get out of whack and one side just becomes a massive debtor to the other – which is when wars start.

            1. Countries don’t compete economically. Companies compete. So trade balances between countries don’t matter. What about New Hampshire’s trade deficit with California? You probably scoff at the concept of trade imbalances between states. In principle it’s no different between countries. Its just an excuse for governments to meddle in the economy and pick politically favorable winners over politically unfavorable losers.

              1. So trade balances between countries don’t matter.

                Absent central bank games and portfolio flows, trade balances directly drive exchange rates which directly drive prices. So unless you are saying that prices don’t matter to trade, then trade balances absolutely do matter.

                And if portfolio flows are what drives trade, then what is happening is precisely that one country is going into debt to another. And you only need to ask every third world country (or Greece/Ireland a few years ago) whether debts owed to foreigners matters. Hell – the US entered WW1 on the side of the Brits/French because that’s who owed us the most money so that’s the side we wanted to make sure won so they could pay us back.

                1. You are confusing trade deficits with budget deficits. The only thing they have in common is the word “deficit.”

                  1. No, you just don’t understand the topic because you have a 4th grade level of comprehension based on your skimming of Economics In One Lesson that you think entitles you to a seat at the table with professional academic economists.

                    1. That was a nice ad hominem. Next time try adding to the conversation instead of sucking your own dick.

                  2. “And you only need to ask every third world country (or Greece/Ireland a few years ago) whether debts owed to foreigners matters.”

                    You are talking about governments owing governments. That has nothing to do with trade. A trade imbalance is when people in one country buy more stuff from people in another country than they sell to people in that country. It has nothing to do with government debt.

                  3. I used to think trade deficits and budget deficits were related or even the same thing. The language is misleading. Our trade deficit with China means Americans buy more Chinese stuff than Chinese people buy American stuff. People. Not governments.

                    1. If you think our newly-found love of cheap Chinese toys in arm’s length transactions is driving China trade you’re just being silly.

                      China wants to peg themselves to the dollar. That is a government decision re pricing it’s own currency. That makes it possible for them to attract American companies to make big capital investments and transfer technology to make China part of their internal supply chain. Those companies do not then engage in an internal arm’s length transaction to trade stuff across their own divisions. They set almost completely arbitrary internal transfer prices so their profits end up attributed to the country with the lowest taxes. Whatever’s left to be balanced is the only part of ‘China trade’ that is actually being driven by trade. This is almost entirely a capital-flow game being played by Wall St and multinationals – at the indirect expense of hollowing out ‘non-connected’ American manufacturers and esp blue-collar workers.

                      This is the cost of being a reserve currency. Gotta ultimately kill exports cuz those are what suck the reserve currency back into the home country. And then it’s not a reserve currency anymore is it.

                    2. Too much business jargon. I’ve never studied business.

                    3. JFree
                      January.26.2020 at 7:36 pm
                      ‘China wants to peg themselves to the dollar….”

                      Your financial fantasies are such I’m guessing you sold when Krugman told you the market would never recover.
                      Shortly:
                      You.
                      Are.
                      Full.
                      Of.
                      Shit.

        2. “Because it’s actually designed around the American foot”.

          Yeah, that’s why I don’t buy jap cars. Not enough leg room. Short fuckers over there.

          Haha. Jesus Christ, dude.

        3. New Balance. My son calls them old guy shoes.

          “Ya never heard of the grandpa rule? Once you have earned the title the law of God and man is you can wear whatever you want. Go find a girl and make some babies. We could use a few more around here.”

      4. what we can do about globalization is not subsidize it. byzantine tax rules incentivize offshoring.

  7. The wealth has all transferred from the 99% to the 1%.

    50 years ago, my average income would pay for a car and a house in only a few years. At this point, I’ll never own a home and I’ll be paying off my car for 5 years. The middle class in this country has been gutted.

    1. Did you read the article? The middle class has been gutted because a substantial portion of its members have moved upwards. As for the stuff you can buy, the equivalent of your house and car of 50 years ago would today be a small, cramped starter home and a $2,000 beater car that badly needs its shocks and brakes replaced. Those things are probably not out of your reach after all.

      1. That wealth was mine, and they took it.

        1. This post tells me someone else is trying on an alter ego. They’re getting pretty thick in here.

          1. “This post tells me someone else is trying on an alter ego.”

            Yep, a fucking lefty ignoramus took the handle.
            Took a while, since it could have been sarc, but we have new company for JFree, Vernon Depner and the rest of the econ-ignoramuses.

    2. Would you want to live in a 50’s home and drive a 50’s car? Would you want 50’s technology and want to work a monotonous 50’s manufacturing job?

      I’d rather be “poor” today than “middle class” in the 50’s.

      1. I’ve been watching the old TV show Peter Gunn (it has awesome music). Those 50s, nice looking as they are, actually sway when they come to a full stop and someone gets out. The suspensions are that bad. And I’ve also read where the average car (non-sports car) of the time has acceleration that would be outdone by the crappiest Kia today.

        1. Henry Mancini also wrote the James Bond theme and some other really good music. My mom had an album of his. I wonder what happened to it.

          1. Mancini did not write the James Bond theme. That was Monty Norman, maybe with some alterations by John Barry (apparently, there were some legal disputes over this).

            Although Wikipedia says that Mancini wrote a very similar piece of music called softly, that Norman might have been inspired by.

            Anyway, Mancini wrote the Pink Panther theme, Moon River, the music for Hatari, and a lot of other great stuff.

            1. Ah yes. I was thinking Pink Panther.

        2. Thinking about it, I wonder how much he influenced today’s music with melodies floating over extensive bass vamping.

        3. I drive a “crappy” Kia and it’s one my best cars ever. 2008 and it refuses to die.

          1. My wife drives a Sorrento and loves it.

        4. The short lived series ‘Johnny Staccato’ was also pretty good. Similar music. Featuring a young John Cassavetes and Gena Rolands.

          1. It also frequently had a young John Williams, the composer(Jaws, Star Wars), as the piano player at the jazz club where Johnny (Cassavetes) hung out.

        5. In the 50’s Kia didn’t make any cars and the best on the road was US iron. European cars were expensive and unreliable. Safety didn’t come into play until the late 50s and Quality was taken up by the Japanese in the 70s using Demmings’ American methods.

        6. Every watch the Honeymooners? And see the standard of living for a middle class bus driver in the 50’s?

      2. “Hey, let me make a completely non-sequitur comparison that does nothing but underscore my opponent’s point!”

        People in the 1950s didn’t have to use up their entire income to afford the luxuries of the 1920s you fucking retarded asshole. There is nothing on earth more hilarious than you religious nutcases rationalizing your own plummeting standard of living while the elite shits in your mouth and you thank them for it. Holy fucking shit.

        1. Yes, elitists like Warren and Sanders with their endless spending. Using QE to devalue our currency. So every dollar I have is worth a little less so illegals can have endless welfare.

        2. I’m sorry you’re poor but you don’t need to take it out on the rest of us.

        3. Almost everything on Earth is cheaper in hours of work required to purchase except for housing, education, and health care…all things that the Gov distorts the most.

        4. *Looks at a smart phone, 50” flatscreen, laptop, air conditioner, car with climate control and premium stereo, bicycle with shock absorbers, video game console…

          Scratches head and wonders WTF Junior means by plummeting standard of living. *

          1. I”m fairly new here. Is this the batshitcrazy “Hihn” I’ve read so much about?

            1. No, no. Hihn’s craziness is more flamboyant than this. It’s characterized by page long rants full of bold text (the bold is used as self defense against bullying aggression).

              Watch for his many telltale posting habits: obsessive fixation on his hobby horse issues (Charlottesville, Scalia’s Heller opinion, abortion, Ron Paul), calling anyone who disagrees with him a thug or goober, claims that constitutional limits on government power violate the “will of the people” and “consent of the governed” and that trying to impose those limits makes you an authoritarian, linking to his own previous comments as “proof” that supports his argument, telling people to “bend over” and prepare to have the truth “jammed up [their] ass”, accusing people of “slurping Trump’s cock”, using his various sock accounts to agree with himself, forgetting to close his HTML tags, arguing with spambots, and finally, the ever present parenthetical expressions of derision (scoff, snicker, smirk).

              The man is my case study. I have spent many fruitless hours trying to figure out what makes him tick.

              1. Don’t forget chortle! ????

            2. What is “batshit crazy” about my comment? People have a better standard of living now than any time in history. It’s absurd to say standards are plummeting.

              1. I don’t want to speak for middlefinger, but I assumed he was asking you whether RFK Jr was Hihn.

        5. You leftists need to stop with the whole “in the 1950s” shtick. Unless you advocate the U.S. bombing the crap out of the rest of the developed world, you need to put that decade out of your mind. It was a unique period in American history that all should hope is never replicated in the future.

    3. Bullshit.

      In 1970, the median income was $9870 (US Census data). The average car cost $3500, and the median house cost $24,000.

      That median income reached the 25% tax bracket, and I would guess an effective tax rate of 15%, so your take home pay might have been $8400. Assuming you did not pay for food, clothing, utilities, healthcare, entertainment, etc., you could have paid for the car and house in 3.3 years–also assuming you got interest-free loans. But in the real world, not your deluded fantasy past, you took out car loans and mortgages, and you had to pay for your other expenses. Again, just a guess, but if the loans doubled the cost of ownership, and if you actually paid for your other needs, you needed at least 12 to 15 years to pay for your car and house.

      And let’s remember that luxury home of 1970: 1500 sq ft, one bath, and no dishwasher or microwave. But go for it, fool.

      1. My 1970 2 bedroom apartment in a swingles complex had a dishwasher, one and 1/2 baths and air conditioning. The rent was $140 a month. No one had a microwave until the mid 1970s then suddenly everyone had one. I always bought a new car with cash and my income was below the medium you listed. My biggest luxury was a vcr. An RCA VHS player way $999.99 when first introduced. Take a look at advertising in Rolling Stone or National Lampoon from those years. Lots of ads for expensive audio equipment all aimed at young boomers with money to burn. They bought them too.
        Three people i worked with, in my blue collar field, leased Porsche 924s, affordably. Eat your hearts out modern humans, the good life was very sweet back then

        1. Oops, my rent in 70 then was $120 a month.

      2. Mortgage interest rates in the 70’s were about 8-9%, trending higher. By early 80’s mortgage rates were in double-digits, reaching 18% in ’81.

  8. “Should we be worried about the wealth amassed by the so-called 1 percent?”

    No.

    1. Especially since the so-called 1 percent insists on wasting their wealth on political advertising.

      1. The Super Bowl ads are gonna be ‘dueling billionaires’ as Steyer tries to outspend Bloomberg in an effort to become a footnote in the 2020 elections

        1. God, YouTube ads are nothing but that insufferable bastard right now.

          1. Which one?

        2. Great thing about it is that they could end up spending a billion between the 2 of them and end up getting absolutely nothing for it.

          The bad news is it will all go to media companies, the good news is they’ll piss it all away too.

      2. Especially since there is no group of people comprising “the 1%”.

    2. Yeah when did market concentration and oligopolistic market power ever lead to suboptimal outcomes? All wealth is justly earned!

      You fucking retarded zealots are absolutely not one iota different from the pathetic religious plebes who rationalized the divine right of kings for 10 centuries.

      1. “You fucking retarded zealots are absolutely not one iota different from the pathetic religious plebes who rationalized the divine right of kings for 10 centuries.”

        Gee, is everyone always making more than you? Keep whining.

        1. He’s clearly poor, and it’s made him bitter.

          1. Thanks for demonstrating the point so aptly.

          2. HURRRRRRRR I have no retort, so uh, yer poor! DURRRRRRRRRRRRRRRRRRR

              1. Maybe it’s the jooze; think this is a Misek sock?

      2. “The will of The People” is the new divine right of kings. That is used to justify force and coercion, which these corporations do not employ. You most certainly do support force and coercion in the name of The People. So who rationalizes? Ain’t us libertarians.

        1. That is used to justify force and coercion, which these corporations do not employ.

          Really? They don’t? Can I get a refund on the taxes I paid to lend 100 billion dollars to foreign governments to buy Boeing airplanes then?

          You most certainly do support force and coercion in the name of The People.

          And you base this on… the shit you just pulled out of your ass and ate? You’re arguing for preserving a status quo where oligopolies are built upon cozy relationships with government and financed by a central bank with a monopoly on money, and I think you’re a pathetic cunt for reflexively choking on billionaire dick instead of supporting reforms like flat taxation, market-based interest rates, sound money, and the elimination of trade barriers. So yeah, you’re still the pathetic boot licking cunt rationalizing your boot licking cunthood. Thanks for playing, boot licking cunt.

          1. Fuck off Tulpa.

          2. “Really? They don’t? Can I get a refund on the taxes I paid to lend 100 billion dollars to foreign governments to buy Boeing airplanes then?”

            Is that strawman heavy? Need assistance? Tony is always dragging them around; maybe he can help.

          3. You would be hard-pressed to find someone on this site who is not a leftist troll supporting Ex-Im. The point about wealth earned via free markets vs. wealth earned through political connections/favoritism is amply made in the article.

    3. I’m so glad none of the Reason B-Teamers wrote this story, they would have come out in favor of the Wealth Tax

  9. Final paragraphs tell a story that is just too much for the liberal mind to bear. The ‘leisure class’ it turns out are the poor, with barely anyone working. Who could have imagined that there might be a positive correlation between work and income.

    1. Socialist paradise?

  10. Bit jarring to see an article here from the libertarian perspective, that’s a welcome change.

    1. The article isn’t from a libertarian perspective at all. The article already accepts a premise that some inequality is bad and some is good, that inequality should be examined and justified using utilitarian arguments.

      And it even gets its justifications wrong. The primary source of “income inequality” in the US is simply that young, inexperienced workers make less than old and experienced workers; “the 1%” isn’t a fixed group, it’s simply people moving up through the income scale as they get older and more experienced.

      1. Thanks for pointing out the young/inexperienced vs. the old/experienced issue. True inequality is within age cohorts. Even that overstates inequality, since people make many choices that affect their incomes. Being a ski bum is a choice. It just doesn’t contribute to your 401k or work experience. Henderson points to this in his last paragraph when he talks about workers per household across quintiles.

  11. Rather than wealth inequality, call it economic diversity. Bam! Vice becomes virtue.

    1. “Income diversity” is brilliant. I am stealing this!

  12. Envy ain’t just a river in Egypt.

  13. 5% of the 1% don’t even have a job. They’re family members acting as money launderers. How many more of them are just below the 1% threshold?

    The issue isn’t some nefarious statistic of inequality, its about standard of living.

    Our economy is wrongheaded. It rewards greed and waste while ignoring suffering. That’s not civilized.

    The problem isn’t the fact that income inequality exists. The problem is the magnitude of inequality on both ends of the scale.

    When we recognize that money has no intrinsic value, that it only represents work for the purpose of trade we realize the problem.

    Does Bezos work 262,000 times more than an uneducated janitor? There is no rationalizing this difference. That janitor goes home weary every day and probably needs to work a second job to feed his family and get minimal healthcare.

    Does it really take 78.5 billion a year to motivate people to innovate? I think not.

    1. “…It rewards greed and waste while ignoring suffering. That’s not civilized…”

      Being the idiot you are, you misspelled ‘self interest’, and made an imbecilic observation besides. The alternative is the ‘new Soviet man’.
      Go back to whining about the joooze.

      1. Says the troll bigot.

        1. When you have no response to you literally just project.

          You’re a piece of shit racist. Kill yourself.

          1. You first.

    2. Does Bezos work 262,000 times more than an uneducated janitor? There is no rationalizing this difference.

      Even Marxist economists have abandoned the labor theory of value. You might consider reading something written since 1954.

      1. Truth is divine.

        1. “Truth is divine.”

          On top of being a scumbag bigot, Misek’s a fucking ignoramus besides.

      2. Let me help that racist POS a bit more:
        “You might consider reading something […].”

      3. He’s read nothing since Mein Kampf

    3. Money represents more than “work.” Otherwise, the crappy sawdustburgers I make for 40 hours each week would earn me as much as the popular hamburgers made each week at (pick your favorite hamburger place), Money is a certificate of achievement awarded you by your fellow humans as a reward for giving them a product they want. {I’m obviously not talking about those whose money comes from holding a gun to another’s head and saying “gimme.”]

      1. You get money for your work to trade with others. Your shitty pay isn’t your reward for making crap.

        If everyone was paid a living wage, the people who direct you to make shit would either make something of greater value or go out of business.

        Get some self respect.

        1. “Get some self respect.”

          Try to find a brain-cell, scumbag.


    4. Does Bezos work 262,000 times more than an uneducated janitor? There is no rationalizing this difference.”

      There’s no rationalizing a difference of income based on more than “‘E’ for Effort”? Citation needed.

      1. There is no rationale.

        If it were based on effort alone, I think the janitor would come out ahead.

        1. Should we base it on effort alone?

    5. If it were so easy for Bezos why doesn’t the janitor just do the same thing?

    6. an uneducated janitor

      These days it’s difficult to get a full-time, permanent position as a janitor without some post-secondary education. An uneducated applicant might get some janitorial work as a temp through an agency.

      1. “These days it’s difficult to get a full-time, permanent position as a janitor without some post-secondary education. An uneducated applicant might get some janitorial work as a temp through an agency.”

        Still looking for a job?

        1. No, I have a good job, but thank you for your concern.

    7. The janitor’s wages are limited by the willingness of people to scrub their own toilets.

      I worked at a start up where we cleaned our own bathroom.

      I pay to have my yard mowed only to the extent I can justify the expense to myself. Any higher and I do it myself.

      1. the willingness of people to scrub their own toilets.

        It’s not just willingness. Properly cleaning a public restroom is a skilled job. Not just anyone can do it. The real limit is people’s willingness to tolerate filthy buildings. I’ve unfortunately worked for a few businesses that chose that option.

        1. Your problem is not considering the time required to acquire said skills. Any able bodied person with proper tools can learn to properly clean a bathroom in a few hours from a teacher.

          The same can’t be said of a business manager, owner, inventor, programmer, etc.

    8. “it only represents work…”

      No.

    9. Does Bezos work 262,000 times more than an uneducated janitor?

      The better question is “is the work Jeff Bezos does worth 262k times more than an uneducated janitor?” The answer is unquestionably “yes”.

      But no, the work Jeff Bezos does is not “hard”, and neither is the work that janitors do. You want to know who the real hardest workers in America are? People on beaches polishing rocks. You want to absolutely bust your ass? Go to the beach and polish some rocks. Is America unjust because we don’t pay everyone ludicrous salaries to polish rocks? Or could it perhaps be that people earn money based on the demand for the task they perform and the scarcity of the skills they provide?

    10. Yes. Chances are that during bezos education, when compared to an uneducated janitor, he spent 262,000 more dollars educating himself at college or business school.

      Maybe bezos is one of those highschool dropout billionaires, I dont really know or care. But even if he is, chances are when you ad up the time bezos spent learning, whether at university, school, or through his own life experience it was 262,000 more hours of learning than the janitor put in.

      So yes, there’s a good chance bezos has put much more time and resources into his lifes work than a janitor did.

      1. If all Bezos did was learn, 8 hours a day 7 days a week it would take 90 years to reach 262,000 hours.

        The solution to the wage discrepancy problem will be developed by working backwards from a number that represents motivation for innovation.

        How want times a “living wage” is required to motivate innovation.

        It will be thousands of times less than 262,000.

        If that doesn’t work for you, fuck you.

        1. “Many times”

        2. “The solution to the wage discrepancy problem will be developed by working backwards from a number that represents motivation for innovation.”

          No “solution” required for no problem, unless it’s the joooze, right Misek?
          Oh, and fuck off and die.

  14. I’m not sure why having a lot of assets is any sort of problem, as long as they are productive assets, producing wealth.

    It seems that their beef really should be with consumption not wealth. As an example take Warren Buffet, he owns dozen of companies, railroads, food producers, insurance companies, and when he makes money he puts it in more productive assets. Now let’s say Warren gets her wealth tax, I can’t see any outcome other than fewer productive assets making more wealth, which translates into more consumption for all of us.

    Once Warren gets it it’s gone, but Buffet uses it make more stuff we all need. Now if Buffet was consuming billions of dollars a year on massive estates, 1000ft yachts, maybe we’d have a target for an effective tax, but then again consumption taxes have always been miserable failures when the target the wealthy, there is a reason even the Democrats were enthusiastic about killing the Federal exise tax against luxury boats, it absolutely killed all the domestic boatyards, where not a single billionaire worked.

    1. This is key.

      I have mixed feelings about the yacht because that generated a lot wealth transfer to workers, but you are right that it is a consumption and not a production. To the extent it does not produce anything of likely value to “society”. Much like the aristocracy of the French Revolution who had sequestered large tracts of arable land for estates.

      In contrast, Gates and Buffet and most billionaires consume a very small fraction of their wealth. So they breed resentment but cause no real harm.

      The same cannot be said for the middle class peddlers of alkaline water etc.

    2. It seems that their beef really should be with consumption not wealth

      More like, it’s none of their fucking business what anyone else does with their own money.

      -jcr

    3. If Buffet is consuming billions a year, he’s still paying someone else to do something. That value isn’t just vanishing into the ether. He’s paying someone to do something he values and then they have money to spend on things they value.

      And owning an estate or a yacht isn’t consumption. Those things retain value after purchase. They’ve just changed ownership, like in any other purchase.

      If he’s just buying them to burn them to the ground then we have a problem to the extent that his fires threaten his neighbors’ property. Otherwise, its his money. He can do what he wants.

  15. Millionaire academic on the payroll of billionaire petrochemical magnate says income inequality is not a problem.

    Welp, good enough for me!

    Anybody actually interested in the topic from the perspective of a liberal market economist who isn’t a Koch shill should check out Thomas Philippon.

    1. Messenger shooting followed by a recommendation of a left-wing alternative?

      Color me shocked.

      1. Dude’s all over the place this am.

        1. It’s really not that mysterious when you realize that the unmitigated bullshit you retards eat up from a multi-billionaire industrial magnate whose fortune depends entirely on lobbying the government for unilateral erasure of trade barriers and perpetual no-interest credit from the central bank doesn’t have fuck all to do with free markets. What you’re defending is abuse oligopoly that would have shocked the conscience of Ricardo or Smith.

          1. Why do all you liberal idiots all talk or write just like hihn?

            You’re all obsessed with calling people retards and imagining visions of conservatives putting gross things in their mouths.

            What is with the fantasizing about people eating nasty things? All you liberal clowns do it, it’s clearly a character trait at this point.

            1. He’s not even making sense at this point.

              1. You being too stupid to comprehend a simple point is not a defect with the simple point, bud.

                1. Well, donkey cocks can’t guzzle cum, they shoot it into your mouth for you to guzzle.

                2. “You being too stupid to comprehend a simple point is not a defect with the simple point, bud.”

                  No, your “simple point” is a mistaken point made by a simpleton. Perhaps learning to think would help.

              2. I’m thinking he’s a morning drinker.

            2. AWWWWWWWWWWWWW are you offended my little snowflake? So offended you didn’t have a retort and had to resort to appeals for civility? Grow the fuck up and make a point when you can spare the time to go cop one from AEI.

      2. AHAHAHAHAHAHAHAHAHAHAHAHAHAHA

        Yes, economics professor Thomas Philippon, author of the book The Great Reversal: How America Gave Up on Free Markets and noted… left winger. What was that you were saying about messenger shooting, you cum guzzling donkey cock?

  16. The article does a good job of talking about unjust wealth and used a politician LBJ as an example. This was fair and if we looked at politician throughout the land we could find additional examples. But it does bring up the question of people using large amount of wealth to pressure politicians for favorable legislation. The Tax Cuts and Jobs Act of 2017 is a good example of such legislation. The bill was generally unpopular and might not have passed. The economy was good and there was no reason for the tax cut at that time. Wealthy political donors pressured Congress to pass the bill. The money these donors received in tax cuts were then used to buy back stock increasing their own wealth with little benefit for the economy. Too much of this happen and for a nation facing a large debt, how much of that is driven by wealthy donors wanting government money directly or indirectly.

    1. The wealthy are always going to have influence on lawmakers that is proportional to their money, rather than proportional to their vote. The solution to the problem is to strictly limit the power of lawmakers so that there is less power for the wealthy to leverage. This is what libertarians push for. Government that is limited to preventing the initiation of force. No more, no less.

  17. This was fair and if we looked at politician throughout the land we could find additional examples

  18. Why all this screaming about income or wealth inequality? What about more important things like life span and sex?

    Too many hot people are hoarding their sexual access. The average prole does not get enough hot pussy or massive dick. The government needs to nationalize what’s in our pants and distribute access more equitably.

    And that whole thing about women living longer than men has to be corrected.

    1. Wait for the sexbots.

  19. This might be the best article on the subject I’ve ever read. Wow. I can’t believe this comes from the same website that’s been publishing so much TDS crap lately.

    Reason would be well-served to keep producing data porn like this instead of getting wrapped up in being CNN-lite.

    1. It’s nice when they’re telling you the comforting lies you want to hear instead of telling others the comforting lies they want to hear isn’t it?

      Google “Gell-Mann Amnesia Effect” some time.

  20. It might be instructive to know the median age for each quintile.

  21. The problem is that historical income inequality has always been really rich aristocrats versus really poor peasants. It doesn’t matter if the aristocrats are making the equivalent of $100k or $100M to the peasants who struggle to buy bread. They are still equally “really rich”.

    However, the vast majority of America has no problem buying basic necessities. We also help people with those through various social programs for the extremely poor. Because of this, we have the uber-rich against people who have to watch their budgets for necessities and struggle to buy cell phones. That fundamentally changes the nature of wealth inequality.

    After all, it’s not the Czars that were the problem. It was the serfs. It wasn’t the Chinese Emperor, it was the peasants. Once the lower classes have a minimum standard of living, the unrest that causes the problems just doesn’t have a good foundation.

    1. various social programs for the extremely poor.

      Being extremely poor does not, by itself, qualify people for public assistance. They have to meet other standards, such as having dependent children or disabilities.

    2. It’s not just historical income inequality, it’s geographical. Instead of looking at income disparities just within the US, let’s look at it on a global basis. Ranking poorest to richest, the poor in the US are halfway up the scale. If you’ve got running water and electricity and shoes and you don’t have a begging bowl, you’re doing better than a lot of people. Ship our poor people over to Zimbabwe and suddenly they’d be middle class.

      Which is not to say “Shut your mouth and quit complaining”, it’s just to point out that no matter what you’ve got, you’re going to be complaining about your neighbor having more. You’re apparently not going to eliminate the “problem” of economic inequality by making the poor richer, only by making the rich poorer. And even then there’s going to be somebody complaining the rich got a better mass grave than the poor – “did you see where they sent them? Those fuckers got three strands of razor wire and four beatings a day! They think they’re so much better than us!”

      1. “Hurrrrrrrrrrrrrrrrrrrrrrrr even though your money is worth 1,000% less today than it was 100 years ago and your inflation-adjusted income – yes, including those much-vaunted health benefits that 20% of the country doesn’t get either – hasn’t increased in 45 years, you should be happy that global multibillionaires are steadily transferring wealth to impoverished parts of the world to create a massive consumer class DURRRRRRRRRRRRRRRRRRRRRRRRRRRRR”

        1. “…including those much-vaunted health benefits that 20% of the country doesn’t get either – hasn’t increased in 45 years…”

          1) 20% of the country chooses not to get…
          2) would you rather go to a hospital in 1975 or 2020?

  22. many economists have concluded that the CPI overstates inflation by not sufficiently adjusting for new products, improvements in quality, changes in the mix of goods and services purchased, and shifts in where consumers buy their goods.

    That’s exactly why the CPI UNDERstates inflation, dipshits. You can’t eat iPhones.

    1. IPhones aren’t a necessity. You can buy a decent smartphone for barely 100$ that has just about every function an iPhone has. IPhones are the Porsche of smartphones, if you can’t afford a Porsche buy a Chevy or a toyota, and don’t complain the cpi doesn’t count Porsches.either

      If you look at necessities you will see the U.S. spends the lowest percentage of income on food than any other country, but you’ll have people complaining that doesn’t count restaurant inflation caused by 15$ an hour minimum wage.

    2. Fucking precisely. This retarded asshole is piggybacking off the work of Gale Pooley and Marian Tupy, who have written papers arguing for negative interest rates because the time-cost of a cherry-picked basket of commodities has declined by ~70% over the last 40 years.

  23. “an economist at George Mason University, has compared the prices of items you could have bought from a Sears catalog in 1975 with prices for similar items in 2006. ”

    If the Sears catalogue ever offered housing, education or medical care, we’d be telling ourselves a different story.

    1. At one point, you could buy a house from the Sears catalogue. The pieces came in one railcar with instructions on putting it together. They also sell home-study courses and medical supplies. So, yes, we are talking about different things.

      I know what you were meaning, but I couldn’t help myself.

    2. “…housing, education or medical care…”

      All three markets heavily distorted by gov’t regulation/intervention.

      1. Precisely. So do you want to exclude them from consideration you stupid cunt?

        1. Ron Jeremy
          January.26.2020 at 9:48 am
          “Precisely. So do you want to exclude them from consideration you stupid cunt?”

          No, you pathetic piece of shit, but not sure I can explain this in single syllables:
          They should not be included in comparisons of what markets do over time.
          Sorry, it took 4 syllables; take your time and sound out the words. Maybe, just maybe, you might ‘figger it oot’.

      2. And nobody really needs that shit, anyway.

        1. You could use a brain, so your bullshit wasn’t as constant.

      3. What’s sad is that he wants them to be even more heavily regulated.

  24. If the middle class is defined as the middle three income quintiles, then in 2018 it consisted of households with income between $25,600 and $130,000. In 1967, the middle three quintiles had income ranging from $19,726 to $54,596 (in 2018 dollars).

    On how many incomes? How many jobs for each income?

  25. less than 4 percent unemployment rate.

    I know this is terribly out of style, but—LOL!

  26. Article was confused right out of the gate, conflating wealth inequality with income inequality. Wealth inequality has a far greater impact on government and culture.

    1. Can you cite where the author conflates the two? I don’t see it.

  27. Wealth inequality has never been lower. Look at the lifestyle differences between the average person and the wealthiest person or even the poorest. Their daily activities have never been more similar. Look at the household appliances of the wealthiest people versus the poorest, these are basically the same. And look at the availability of tech gizmos, the ability of the poor to afford the premium tech has never been higher. So no this is not a crisis or a threat to democracy.

    Wealth inequality is not from tax cuts. Wealth inequality is a function of Fiat Currency. As the amount of currency grows, the ability of those receiving the newly created currency to use it to earn more grows proportionally. Those in the lowest classes normally receive the recently created currency last. No government policy and the welfare state do increase wealth inequality but nowhere near as much as inflation. And to make matters worse, asset prices (Especially paper asset prices) owned in majority by the rich, have historically grown faster than wages thus making the effects of inflation all the greater.

    1. So no this is not…a threat to democracy.

      That conclusion does not follow from your facts. The threat to democracy is the ability of the ultra-rich to buy influence. It has nothing to do with the poor having nice refrigerators.

      1. Except no influence is being bought. The socialist morons are socialist morons of their own volition.

        1. no influence is being bought

          Since no one could be that stupid, I’ll assume I’m not understanding you.

          1. Scroll up. He’s that stupid.

      2. “The threat to democracy is the ability of the ultra-rich to buy influence.”

        I would re-state that as:

        “The threat to democracy is the ability of the political class to sell influence.”

        But then, that’s just me…

        1. To be clear, the problem isn’t people wanting to buy influence as much as it is people willing to sell it. If influence wasn’t available for sale, no amount of desire to buy would matter.

          Steve Martin, as Roger Cobb:
          “Just because my grandfather didn’t rape the environment and exploit the workers doesn’t make me a peasant. And it’s not that he didn’t want to rape the environment and exploit the workers, I’m sure he did. It’s just that as a barber, he didn’t have that much opportunity.”

      3. The threat to democracy is the ability of the ultra-rich to buy influence.

        So reduce government power. That will send the money that currently flows into bribes for politicians into more profitable uses.

        -jcr

  28. Wage inequality plays out on much smaller scales. How often have you seen someone ask the question “my boss has offered me a promotion with more work but little or no raise. Should I take it?”

    I ask myself the question. Why the hell do I put up with the hassles of being a manager? My employees make almost as much as I do.

    1. Do you know how to do their jobs? Most managers don’t.

      1. “Most managers don’t.”

        Cite missing.

          1. So your cite is your claim? Are you the new Hihn sock?

            1. I am the final authority on what my observations and opinions are.

              1. So you admit to being full of shit. Fine; you’re now added to that list.

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  30. Until everyone is living in the streets and eating rats to survive, life just isn’t fair.

    1. Sex is a human right!

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  32. Given what economists know about the harmful effects from raising already high marginal tax rates even higher

    Cites facts not in evidence. There’s no relationship from 1946-current that GDP is correlated with higher marginal tax rates. In fact the regression line is slightly negative— though not statistically significant.

    1. The other 99.9999999% of the article is bullshit, too.

      I just don’t have time for that.

      1. “The other 99.9999999% of the article is bullshit, too.”
        As is 100% of your post.

    2. “…There’s no relationship from 1946-current that GDP is correlated with higher marginal tax rates….”

      Care to tell us why you picked that span and give us some numbers (by DATE, for instance the result of JFK’s tax reduction), rather than a total span?
      You’ll forgive me for suspecting you’re a lying POS; you’ve proven to be almost constantly.

      1. You mean 1946? I wanted to make it look good for you guys so I cherry-picked that year as GDP growth was terrible and marginal tax rates were high.

        From 1946-2018

        Y= 2.4+0.0091x

        If I do things from the Kennedy era it looks worse for you guys. From 1961-2018:

        Y=1.51+0.031x

        Where Y is GDP GROWTH (%)
        And x is highest marginal tax rate(%)

        Thus, if you want to grow the economy by 0.3% faster you should raise marginal tax rates by 10%.

        1. The highest tax rates were not 9.1 and 3.1 percent in the given years. If you don’t understand decimal points it’s terribly difficult to take you seriously. Moreover tax receipts are more important than rates – receipts went up when rates went down. During the periods of high rates in your sample there were also many more deductions available – the actual rate paid was never anywhere even close to the marginal rate. And lastly, correlation does not imply causation. We have the Obama tax hikes as a sample we can easily use to disprove your retarded assertion that a 10% increase in marginal rates has a linear and constant relationship to .3% GDP growth. Thanks for playing.

          1. I checked. The analysis holds up. I’m well aware of the caveats.

            1. “I checked. The analysis holds up. I’m well aware of the caveats.”

              IOWs, don’t bother you with facts? Hmmm…
              Why don’t you go a bit further here and ‘prove’ how Venezuela is actually doing just fine, if you ignore……

              1. don’t bother you with facts?

                So far, you have 30 posts in this thread. Exactly one of them contains any facts or reasoning. The rest are just playground insults. Don’t be surprised if there is very little interest here in engaging you in discussion.

        2. “Thus, if you want to grow the economy by 0.3% faster you should raise marginal tax rates by 10%.”

          Thus, if you want to ‘prove’ lefty lies, you should ignore co-founders; tell us about the pent-up demand in 1946 while the high marginal rate applied to nearly no one.
          You really are a pathetic piece of adolescent shit.

        3. Marginal rates mean squat in the face of the myriad allowable deductions and tax shelters of the time. The effective rate line is far more telling and largely flat.

    3. Sorry… I misspoke. There is a relationship. Higher marginal tax rates on rich taxpayers spur economic growth.

      1. Article. Refuted. Hi-5.

        1. Bullshit added. Laughter ensues…

  33. A rising tide lifts all boats. C’mon, get your aphorisms out there.

  34. The minute people talk about “deserving” I am done with the discussion.

    The billions are nothing more than numbers on a ledger to me. They do not change my life at all.

    My libertarian moment came when I realized the importance of three words “ I don’t care”

    I don’t care about your income and wealth. I don’t care what you do with it. It is none of my business.

    To paraphrase Harry Browne. Nobody owes you anything. Not an income, not a higher wage, not love or friendship. Nothing. Once you understand that you are free.

    1. I don’t care what you do with it. It is none of my business.

      Well, that’s just stupid. When they use it to purchase influence and favor with the government, which has the power to coerce you, then it most definitely affects your business.

      1. Oh that. Corrupt crony politics is nothing new. That is why we seek to limit the power of government over our lives. Taking money from Bezos and giving it to government as taxes is not going to change that. It is just another form of it.

        I could vote to raise your taxes…or you could do me a favor.

      2. “…When they use it to purchase influence and favor with the government, which has the power to coerce you, then it most definitely affects your business.”

        For the sake of discussion, let’s accept this is true. Is your solution to use the government to reduce their wealth? What do you propose?

        1. Hey, maybe we could tax everyone identically so that there weren’t massive incentives to malinvestment, or lift restrictions on access to capital markets, or let the market determine interest rates, or eliminate barriers to entry erected by incumbents with oligopolistic market power. Maybe there’s more to free markets than reflexively sucking billionaire cock.

          1. “Maybe there’s more to free markets than reflexively sucking billionaire cock.”

            Is that code for ‘letting people keep what they earn’? I have a hard time keeping up with class-politics terms.

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  38. The lesson seems clear for people who want to avoid being in the bottom quintile: Try your hardest to get a job year-round.

    Things have really gone downhill since children stopped working so hard. Gotta eliminate child labor laws so we can get more people working in the lower quintiles.

    1. Or get rid of the minimum wage which prices uneducated and unskilled workers out of an entry-level job where they could get the experience and training to command better wages. That would be a start.

      Minimum wage creates a Catch-22. No job no experience, no experience no job.

  39. Wealth ‘inequality’ exists because some groups have higher IQ’s than others.
    And, it has been the policy of the government to subsidize and encourage the indiscriminate breeding of low IQ dependents and allow the wholesale invasion of millions of low IQ immigrants.

    1. Margaret? I thought you were dead.

  40. Notice that Thoma subtly jumps from “income inequality” to “lower income.

    And click on this link
    https://www.fattustatus.in/2020/01/new-80-status-quotes-in-hindi-status.html?m=1

  41. There really should be more articles about articulating the 1%.
    The Free-Enterprise 1%.
    The Gov Tax-pool Embezzling 1% (Subsidized – Healthcare, Housing)
    The Gov Policy “winner” 1% (Monopolized – Education)

    The last two are “unfair” the first one is created by Yours, Mine and Millions who found their “service” irresistible and done SO-WELL no one could find a way to “beat” them.

    I use to think CEO’s that got over $1M/yr salary wasn’t right; but one only has to realize that a company NEVER has to pay their CEO that much and competitors could hire a CEO and out-price them? Right? So obviously (although; I myself do no know the answer to each situation) there is every natural and reasonable law of being successful telling us they actually do deserve that income; otherwise they wouldn’t be getting it and still out-preforming everyone else.

  42. The closing advice — to get a job and get a (working) spouse — is good advice even for our bottom 20%. But it may be harder for many of them than it is for the rest of us.

    20% of the population has a sub-normal IQ (= below 90). 5% are clinically neurotic. 8% have a felony in their background. 12%+ are functionally illiterate. About 8% are single parents with a dependent child at home. About 10% have a chemical dependency (drugs or alcohol). About 12% have some disability (blind, amputee, etc.).

    If there were no overlap between these categories, we’d have 2/3 of the population trying to make it while dragging one anchor or another. It’s inevitable that we’ve got a lot of overlap between these handicaps — many people laboring under 2, 3, or 4 of these.

    Pick any two and consider how much tougher that would make it to follow Henderson’s good advice. Who wants you?

    Clearly in that bottom quintile we’ve got a fair number who we’re going to have to help. They can’t carry themselves.

    1. … And 99% of the ‘Stupid’ categories you listed are SOLELY the end result of government encouraging them to be stupid by subsidizing their stupidity.

      Babies don’t pop out with an IQ of 150 or a drug dependency or a law-abiding instinct. You’re not proposing to ‘help’ anyone!!! You’re proposing to support their adolescent behavior forever.

      For the more like 2% with actual physical disabilities most can be ‘learned’ to deal with and still be functional in one area or another. The rest can certainly be handled by LOCAL government or just flat out charity!

      I see leeches everyday with some sort of ‘unable to grow-up’ claim that gets more and more far-fetched every year.

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  47. Excellent article, especially data-wise. The only thing missing in it is links or references to much of those valuable data.

  48. I much prefer the term “income disparity,” because “income equality” is neither deserved nor desirable for the nation. Burger flippers fired because minimum wage went up again are simply not entitled to the same money earned by neurosurgeons.

    I’m in favor of universal basic income, as most recently articulated by Andrew Yang, and I’m fully cognizant of what happened when FEMA handed out $500 debit cards to Katrina refugees. Of course it will play out “each according to his gifts,” and it’s about time government let people know there’s a point past which they will not be protected from themselves.

  49. We should be thankful for those among us who create the most wealth.

    1. The problem is that it’s possible, once you have wealth, to accumulate enormous wealth without creating shit by purchasing government coercive power to skim wealth from others and protect yourself from risk of loss.

      1. It wouldn’t be so bad if we hadn’t gone communist and thrown away the Constitution. The federal government shouldn’t be doing ANYTHING but handling international affairs.

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