4T is Speeding Along Now

[sbarrera]

(02-03-2020, 01:17 PM)Warren Dew Wrote:

(02-03-2020, 06:41 AM)sbarrera Wrote: Hmm...I have seen lots of data showing that inequality is getting worse.

Your data is questionable because it misses two critical issues.  First, it doesn't show what's happening for the top 0.01%, or even the top 0.1%, which is where the problems arise.  Second, for the bottom income category, it only accounts for taxable income, which fails to include government transfers, which account for a lot of the disposable income in this category.

However, the effect I'm talking about is visible even in your graphs.  For example, what the first graph shows is that income inequality grew rapidly during the Unraveling, not during the Crisis.  The "top 1%" line levels out around 2005.  Your fourth graph shows the "top 5%" line leveling out around 2001.  I rounded off to 2000, which is where I've seen it in graphs of the top 0.1%, but from a generational standpoint, these dates all mark the same time:  the transition from Unraveling to Crisis.

Your fourth graph also buttresses my argument for what was happening during the unraveling:  while the top income category was gaining more during the unraveling, the bottom income category was also gaining, which is why there wasn't resentment against inequality at the time.

Again, since the beginning of the crisis, there has been little movement in incomes or inequality.  What has happened has been stagnation of incomes at all levels, leading to resentment throughout the society.  Most people don't know enough economics to blame the transition from competitive markets to oligopoly and monopoly markets, so they blame income inequality instead.

I see you points, Warren. And in an era that is turning away from individualism and risk-taking, it will be hard to convince people that monopolists are a problem. Easier to resent the wealthy than to understand how they maintain their wealth. But then why not a wealth tax, as Warren proposes and Piketty recommends?