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Every year the GDP grows while inequality gets worse. This is going to come home when most Americans look at the topline stats (GDP and unemployment) getting be

Every year the GDP grows while inequality gets worse. This is going to come home when most Americans look at the topline stats (GDP and unemployment) getting better while their own lives get worse. Are we optimizing the wrong thing?

zone411 8y ago
The inequality in the US is growing but not as fast as you might think from listening to the media: [1]. The real median household income has grown faster since 2010: [2] (the mean household size went from 2.59 to 2.53 during this time [3]) and I think that matters more to an average person than the GDP (as does unemployment like you said). [1] https://fred.stlouisfed.org/series/SIPOVGINIUSA https://fred.stlouisfed.org/series/SIPOVGINIUSA [2] https://fred.stlouisfed.org/series/MEHOINUSA672N https://fred.stlouisfed.org/series/MEHOINUSA672N [3] https://www2.census.gov/programs-surveys/demo/tables/families/time-series/households/hh4.xls https://www2.census.gov/programs-surveys/demo/tables/familie...
smallnamespace 8y ago
Yes, it's because of central bank policy since '08, which are equivalent to price controls of assets (bonds and mortgages aren't allowed to be too cheap). This directly benefits asset-holders in general and punishes everyone else. In the past, central banks in this sort of situation might have actually printed money instead. Actual printing of money is good for inequality—it distributes liquidity throughout the economy, encourages inflation, which effectively transfers wealth from current nominal asset-holders to debtors, and depending on how the money gets printed (e.g. use it to pay for a progressive tax credit), it can directly reverse inequality. Why didn't central banks print money? A main reason is because the way printing money works is it has to happen through well-capitalized banks, which didn't exist in the post-crisis era, and it was hugely politically unpopular to bail them out. Also, most people don't understand the Rube Goldberg machine of central bank policy and would've opposed money printing or inflation, even if it would've been the key to a real, broad-based economic recovery.
- listenallyall 8y ago
  >> most people don't understand and you sir, most certainly don't understand economics if you believe money printing and inflation are paths to prosperity. go check out venezuela
  - Gibbon1 8y ago
    And you are deeply ignorant of you think that Venezuela which is under industrial and financial assault by the US and Europe is at all germane.
    - listenallyall 8y ago
      Lol. Venezuela made its own bed, its currency lost 99.99% of its value without any interference from foreign actors. Chavez's open friendship with Castro and harsh criticism of multiple US administrations was his own choice and set up the disastrous Maduro reign. However you interpret the actions in the past few months, it is in response to two decades of failed policies, resulting in unprecedented chaos, unemployment, scarcity and poverty. >> By November 2015, a multi university study found that about 73% of households and 76% of Venezuelans were living in poverty.[213] https://en.wikipedia.org/wiki/Economic_policy_of_the_Nicol%C3%A1s_Maduro_administration https://en.wikipedia.org/wiki/Economic_policy_of_the_Nicol%C... Would you, or 'smallnamespace,' like to provide counter-examples where high inflation and printing money led to prosperity?
      - smallnamespace 8y ago
        I think your response just proves my point, which is that people have a strong knee-jerk reaction to any level of inflation. There's quite a difference between a 3-5% level of inflation, which helps smooth shocks in the economy and forces the rich to participate in the real economy to keep the value of their money, vs. hyperinflation, which nobody is advocating for.
        listenallyall 8y ago
chrisco255 8y ago
Their lives aren't getting worse. Income grew last year. A couple of things need serious addressing: cost of housing (almost entirely due to protectionist zoning laws), cost of education (starting to think boot camps and trade schools aren't such a bad idea after all) and cost of healthcare. I think there's solutions for those three.
- shadowbannedtoo 8y ago
  And fees/fines. The poor are being hammered with high fees/fines. Personally I think it's time to tie all fees (including governmental fees(like Patent fees),and fines to income. (I still don't know if I'm still Shadowbanned?)
- seanmcdirmid 8y ago
  Income growth doesn’t mean equity. It is still getting harder for poor people and easier for rich people. Housing isn’t just, or even primarily, protectionist zoning laws. Many places really are space constrained, and even going for density doesn’t always reduce costs (many of the densest cities are the most expensive). As for education and healthcare, these are problems that other developed countries have solved and so are uniquely American.
  - JamesBarney 8y ago
    > many of the densest cities are the most expensive I don't think the causation runs from dense to expensive. It's desirability that is causing both density and expensiveness. What do you think has a larger influence on housing prices than protectionist zoning and other regulations that severly restrict supply?
    - harimau777 8y ago
      For sake of argument: Might NIMBY sentiment actually be due to insufficient regulations? I'd be a lot more comfortable with someone building near me if I was confident that they weren't going to build some soulless concrete eyesore.

zone411 8y ago

The inequality in the US is growing but not as fast as you might think from listening to the media: [1]. The real median household income has grown faster since 2010: [2] (the mean household size went from 2.59 to 2.53 during this time [3]) and I think that matters more to an average person than the GDP (as does unemployment like you said). [1] https://fred.stlouisfed.org/series/SIPOVGINIUSA https://fred.stlouisfed.org/series/SIPOVGINIUSA [2] https://fred.stlouisfed.org/series/MEHOINUSA672N https://fred.stlouisfed.org/series/MEHOINUSA672N [3] https://www2.census.gov/programs-surveys/demo/tables/families/time-series/households/hh4.xls https://www2.census.gov/programs-surveys/demo/tables/familie...

smallnamespace 8y ago

Yes, it's because of central bank policy since '08, which are equivalent to price controls of assets (bonds and mortgages aren't allowed to be too cheap). This directly benefits asset-holders in general and punishes everyone else. In the past, central banks in this sort of situation might have actually printed money instead. Actual printing of money is good for inequality—it distributes liquidity throughout the economy, encourages inflation, which effectively transfers wealth from current nominal asset-holders to debtors, and depending on how the money gets printed (e.g. use it to pay for a progressive tax credit), it can directly reverse inequality. Why didn't central banks print money? A main reason is because the way printing money works is it has to happen through well-capitalized banks, which didn't exist in the post-crisis era, and it was hugely politically unpopular to bail them out. Also, most people don't understand the Rube Goldberg machine of central bank policy and would've opposed money printing or inflation, even if it would've been the key to a real, broad-based economic recovery.

listenallyall 8y ago
>> most people don't understand and you sir, most certainly don't understand economics if you believe money printing and inflation are paths to prosperity. go check out venezuela
- Gibbon1 8y ago
  And you are deeply ignorant of you think that Venezuela which is under industrial and financial assault by the US and Europe is at all germane.
  - listenallyall 8y ago
    Lol. Venezuela made its own bed, its currency lost 99.99% of its value without any interference from foreign actors. Chavez's open friendship with Castro and harsh criticism of multiple US administrations was his own choice and set up the disastrous Maduro reign. However you interpret the actions in the past few months, it is in response to two decades of failed policies, resulting in unprecedented chaos, unemployment, scarcity and poverty. >> By November 2015, a multi university study found that about 73% of households and 76% of Venezuelans were living in poverty.[213] https://en.wikipedia.org/wiki/Economic_policy_of_the_Nicol%C3%A1s_Maduro_administration https://en.wikipedia.org/wiki/Economic_policy_of_the_Nicol%C... Would you, or 'smallnamespace,' like to provide counter-examples where high inflation and printing money led to prosperity?
    - smallnamespace 8y ago
      I think your response just proves my point, which is that people have a strong knee-jerk reaction to any level of inflation. There's quite a difference between a 3-5% level of inflation, which helps smooth shocks in the economy and forces the rich to participate in the real economy to keep the value of their money, vs. hyperinflation, which nobody is advocating for.
      - listenallyall 8y ago

chrisco255 8y ago

Their lives aren't getting worse. Income grew last year. A couple of things need serious addressing: cost of housing (almost entirely due to protectionist zoning laws), cost of education (starting to think boot camps and trade schools aren't such a bad idea after all) and cost of healthcare. I think there's solutions for those three.

shadowbannedtoo 8y ago
And fees/fines. The poor are being hammered with high fees/fines. Personally I think it's time to tie all fees (including governmental fees(like Patent fees),and fines to income. (I still don't know if I'm still Shadowbanned?)
seanmcdirmid 8y ago
Income growth doesn’t mean equity. It is still getting harder for poor people and easier for rich people. Housing isn’t just, or even primarily, protectionist zoning laws. Many places really are space constrained, and even going for density doesn’t always reduce costs (many of the densest cities are the most expensive). As for education and healthcare, these are problems that other developed countries have solved and so are uniquely American.
- JamesBarney 8y ago
  > many of the densest cities are the most expensive I don't think the causation runs from dense to expensive. It's desirability that is causing both density and expensiveness. What do you think has a larger influence on housing prices than protectionist zoning and other regulations that severly restrict supply?
  - harimau777 8y ago
    For sake of argument: Might NIMBY sentiment actually be due to insufficient regulations? I'd be a lot more comfortable with someone building near me if I was confident that they weren't going to build some soulless concrete eyesore.