5 ms·

It's not about turning the US into a European country, it's about decreasing wealth inequality. The US is doing a lot worse than the countries you mention--Gini

It's not about turning the US into a European country, it's about decreasing wealth inequality. The US is doing a lot worse than the countries you mention--Gini of 41 for the US, vs 27-32 for Switzerland, France, Belgium, Germany. The poverty rate and poverty gaps are also a lot higher in the US. https://data.oecd.org/inequality/poverty-gap.htm https://data.oecd.org/inequality/poverty-gap.htm

eanzenberg 6y ago
Perceived wealth inequality. The US has less wealth inequality because most of it is already wealthy. The shrinking middle class is shrinking because most of them are moving to the upper middle class.
- heylook 6y ago
  Do you have any data to back up this claim? Parent comment provided links. It seems fair to me that a rebuttal should as well.
  - bhupy 6y ago
    It's fairly well documented -> https://www.nytimes.com/interactive/2015/01/25/upshot/shrinking-middle-class.html https://www.nytimes.com/interactive/2015/01/25/upshot/shrink...
    - neixidbeksoxyd 6y ago
      > Since 2000, the middle class has been shrinking for a decidedly more alarming reason: Incomes have fallen. How does that support the hypothesis that the middle class is shrinking because incomes are rising?
      - bhupy 6y ago
        We're talking about since 1967. The Great Recession is a confounding variable.
        joe463369 6y ago
        Cold comfort for anyone born after 1990
        bhupy 6y ago
        Sure, but the root cause of that is pretty well known to be the proliferation of credit default swaps that led to a housing bubble that burst in 2008, and not the mere existence of billionaires writ large. Also, here's a more recent source (August 2020) that's actually an academic paper -> https://www.brookings.edu/wp-content/uploads/2020/08/Squeezing-the-middle-class_Report.pdf https://www.brookings.edu/wp-content/uploads/2020/08/Squeezi... > The analyses presented here confirm the broadly accepted picture of rising income inequality and slowing income growth for middle-class Americans. But a few additional points are worth drawing out. First, while the benefits of economic growth have not accrued equally, they have not gone solely to the top 1%. The upper middle class has grown. Second, the main reason for the shrinking of the middle class (defined in absolute terms) is the increase in the number of people with higher incomes.
    - peferron 6y ago
      Your link shows that, since 2000, the lower class has been growing and the middle and upper classes have been shrinking.
      - bhupy 6y ago
        Sure, but since 1967, upper class has risen. The Great Recession is a confounding variable.
        heurist 6y ago
        In a causal system the Great Recession is not a confounding variable, it's an inflection point. As will be the recession triggered by covid.
        bhupy 6y ago
        It is definitely a confounding variable in the context of the question at hand (posed by the GP commenter): why inequality is a bad thing, and whether it is directly responsible for the "shrinking middle class" going to the "lower class" instead of the "upper class". Historically, the middle class has been shrinking because the upper class has been rising. Insofar as that hasn't been the case since 2000, it's not because of the mere existence of billionaires, it's because of a specific type of financial instrument (in one case), and a one-in-a-century global pandemic (in another case). The mere existence of Bill Gates et al did not cause either the credit default swap crisis or COVID-19.
- bgreezy 6y ago
  i'm reading piketty right now and have to say, some overwhelmingly clear and rigorously collected data in this one book alone convincingly contradict this ill-informed statement
  - bhupy 6y ago
    First of all, the observation that US's shrinking middle class is attributable to an increasing upper-middle class is objectively true, it's not that controversial [4]. Second of all, Piketty's argument is more that capital's share of growth will necessarily outpace labor's share of growth (r > g). Third of all, Piketty isn't gospel. There have been a number of rebuttals published since his findings that make fairly strong refutations. The IMF studied empirical evidence to see if it matches up with Piketty/Saez/Zucman's theoretical models, and was unable to validate their finding[1]. Further studies showed that r > g almost entirely goes away when you exclude land/housing appreciation, mostly attributable to restrictive zoning regulations [2]. Auten & Splinter found that Piketty failed to account for existing taxes and transfers. When you do that, the perceived growth in inequality goes away almost entirely[3][5]. [1] https://www.imf.org/external/pubs/ft/wp/2016/wp16160.pdf https://www.imf.org/external/pubs/ft/wp/2016/wp16160.pdf [2] https://core.ac.uk/download/pdf/35310497.pdf https://core.ac.uk/download/pdf/35310497.pdf [3] http://davidsplinter.com/AutenSplinter-Tax_Data_and_Inequality.pdf http://davidsplinter.com/AutenSplinter-Tax_Data_and_Inequali... [4] https://www.nytimes.com/interactive/2015/01/25/upshot/shrinking-middle-class.html https://www.nytimes.com/interactive/2015/01/25/upshot/shrink... [5] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3546668 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3546668
    - peferron 6y ago
      Your link [4] shows that, since 2000, the lower class has been growing and the middle and upper classes have been shrinking.
      - bhupy 6y ago
        Sure, but look from 1967. The trend-line is still positive at a macro level. Since 2000 we had a huge recession, so it's not super conclusive.
- enraged_camel 6y ago
  This is laughably wrong. Social mobility in the USA is the lowest among developed nations. Indeed, most social mobility in america is downward, not upward.

eanzenberg 6y ago

Perceived wealth inequality. The US has less wealth inequality because most of it is already wealthy. The shrinking middle class is shrinking because most of them are moving to the upper middle class.

heylook 6y ago
Do you have any data to back up this claim? Parent comment provided links. It seems fair to me that a rebuttal should as well.
- bhupy 6y ago
  It's fairly well documented -> https://www.nytimes.com/interactive/2015/01/25/upshot/shrinking-middle-class.html https://www.nytimes.com/interactive/2015/01/25/upshot/shrink...
  - neixidbeksoxyd 6y ago
    > Since 2000, the middle class has been shrinking for a decidedly more alarming reason: Incomes have fallen. How does that support the hypothesis that the middle class is shrinking because incomes are rising?
    - bhupy 6y ago
      We're talking about since 1967. The Great Recession is a confounding variable.
      - joe463369 6y ago
        Cold comfort for anyone born after 1990
        bhupy 6y ago
        Sure, but the root cause of that is pretty well known to be the proliferation of credit default swaps that led to a housing bubble that burst in 2008, and not the mere existence of billionaires writ large. Also, here's a more recent source (August 2020) that's actually an academic paper -> https://www.brookings.edu/wp-content/uploads/2020/08/Squeezing-the-middle-class_Report.pdf https://www.brookings.edu/wp-content/uploads/2020/08/Squeezi... > The analyses presented here confirm the broadly accepted picture of rising income inequality and slowing income growth for middle-class Americans. But a few additional points are worth drawing out. First, while the benefits of economic growth have not accrued equally, they have not gone solely to the top 1%. The upper middle class has grown. Second, the main reason for the shrinking of the middle class (defined in absolute terms) is the increase in the number of people with higher incomes.
  - peferron 6y ago
    Your link shows that, since 2000, the lower class has been growing and the middle and upper classes have been shrinking.
    - bhupy 6y ago
      Sure, but since 1967, upper class has risen. The Great Recession is a confounding variable.
      - heurist 6y ago
        In a causal system the Great Recession is not a confounding variable, it's an inflection point. As will be the recession triggered by covid.
        bhupy 6y ago
        It is definitely a confounding variable in the context of the question at hand (posed by the GP commenter): why inequality is a bad thing, and whether it is directly responsible for the "shrinking middle class" going to the "lower class" instead of the "upper class". Historically, the middle class has been shrinking because the upper class has been rising. Insofar as that hasn't been the case since 2000, it's not because of the mere existence of billionaires, it's because of a specific type of financial instrument (in one case), and a one-in-a-century global pandemic (in another case). The mere existence of Bill Gates et al did not cause either the credit default swap crisis or COVID-19.
bgreezy 6y ago
i'm reading piketty right now and have to say, some overwhelmingly clear and rigorously collected data in this one book alone convincingly contradict this ill-informed statement
- bhupy 6y ago
  First of all, the observation that US's shrinking middle class is attributable to an increasing upper-middle class is objectively true, it's not that controversial [4]. Second of all, Piketty's argument is more that capital's share of growth will necessarily outpace labor's share of growth (r > g). Third of all, Piketty isn't gospel. There have been a number of rebuttals published since his findings that make fairly strong refutations. The IMF studied empirical evidence to see if it matches up with Piketty/Saez/Zucman's theoretical models, and was unable to validate their finding[1]. Further studies showed that r > g almost entirely goes away when you exclude land/housing appreciation, mostly attributable to restrictive zoning regulations [2]. Auten & Splinter found that Piketty failed to account for existing taxes and transfers. When you do that, the perceived growth in inequality goes away almost entirely[3][5]. [1] https://www.imf.org/external/pubs/ft/wp/2016/wp16160.pdf https://www.imf.org/external/pubs/ft/wp/2016/wp16160.pdf [2] https://core.ac.uk/download/pdf/35310497.pdf https://core.ac.uk/download/pdf/35310497.pdf [3] http://davidsplinter.com/AutenSplinter-Tax_Data_and_Inequality.pdf http://davidsplinter.com/AutenSplinter-Tax_Data_and_Inequali... [4] https://www.nytimes.com/interactive/2015/01/25/upshot/shrinking-middle-class.html https://www.nytimes.com/interactive/2015/01/25/upshot/shrink... [5] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3546668 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3546668
  - peferron 6y ago
    Your link [4] shows that, since 2000, the lower class has been growing and the middle and upper classes have been shrinking.
    - bhupy 6y ago
      Sure, but look from 1967. The trend-line is still positive at a macro level. Since 2000 we had a huge recession, so it's not super conclusive.
enraged_camel 6y ago
This is laughably wrong. Social mobility in the USA is the lowest among developed nations. Indeed, most social mobility in america is downward, not upward.