4 ms·

The problem with this analysis and others like it is it makes atemporal distributional claims as if they were temporal. And conflates unrelated measures. Eg.,

The problem with this analysis and others like it is it makes atemporal distributional claims as if they were temporal. And conflates unrelated measures. Eg., consider the claim that "college graduate salaries have stagnated" -- this is true, but in 1990 c., 10% were graduates; today that's c. 55%. So what's happening is this artificial grouping "college graduate" has massively expanded, whilst maintaining its average. That's a remarkable increase in wealth for the 40% "left out" three decades ago. Consider the claim about "productivity". The reason production has increases at a greater pace than wages is automation. No one is "missing out" on the benefits from automation; they correspond to massive increases in disposable income and time, as we benefit from those tools/products. > there absolutely is a vast and growing disparity between the lifestyles of the <50% and those of the >10% This is true only due to the extraordinary efficacy of capitalism. As in all of these cases it's the exceptional increases in abundance which have lead to this apparent "disparity in lifestyle". And if you chose different percentiles it would be false. The bottom 10% have seen their disposable income double in a time when the top 50% have seen it treble. Thus an apparent "gap". This is the duplicitous information missing from all these atemporal comparisons. Let's be clear. The top 1% in 1950 lived more differently than the rest of society in 1950; more so than the top 1% do of society today. Today the top 1% live much more like the top 10% who live much more like the top 50%, and so on. Much of the apparent difference is created from two effects, (1) the media and social media show the lifestyles of the very rich as if they were very common; and (2) people feel "the local rate of change of growth". The vast majority of this alleged "problem with inequality" is just that local rates of change of growth have been unstable since the financial crisis in 2008. Despite gains for everyone since then, people do not "remember the macroeconomy of 2008" and compare it today. Rather, all they see is the day-to-day negative news created by accelerating and decelerating growth. Even when growth is positive, if it is decelerating, people think the sky is falling. Nothing about the contemporary economy is much different, in distributional terms, than it was in 2006. Where then was this hysteria?

skohan 6y ago
> So what's happening is this artificial grouping "college graduate" has massively expanded, whilst maintaining its average. That's a remarkable increase in wealth for the 40% "left out" three decades ago. You are leaving the cost of education out of the equation, which has increased massively over the past 30 years. Most Americans graduate under a mountain of debt. If salaries have remained stagnant, for the 10% who would have been that amounts to a net lower salary, at least for the first X years of employment until the debt is paid off. For the other 40%, they might have had the option to go work in a steel mill or an auto plant with a high-school degree, and now they have to go to university, and acquire a massive debt to have a hope of competing for a job outside the service industry. I'm not so convinced this is a net win for anyone involved. > Let's be clear. The top 1% in 1950 lived more differently than the rest of society in 1950; more so than the top 1% do of society today. Today the top 1% live much more like the top 10% who live much more like the top 50%, and so on. I'm also not so convinced this is the case. If you want to make the argument that I am living like Jeff Bezos because we can both have an LCD TV and and iPad, I think this is a very shallow argument. While the cost of consumer goods has not risen significantly in the past few decades, the cost of the markers of a middle-class existence absolutely have. For instance, due to the increased cost of housing, the rate of home ownership among millennials is much lower than that of previous generations. Due to student loan debt and the high cost of healthcare, many young people who might have risked leaving a 9-to-5 job to start a business don't feel safe to do so. Low cost consumer goods are nice, but the "American Dream" has always been about owning your own future, and being able climb into the next social class above your origins with hard work and ingenuity. Due to income inequality, the price of getting a seat at the table is what has increased out of the reach of almost everyone.
- danaris 6y ago
  To be fair, it is a net win for the overall education of our country. That's not something to just dismiss—but it doesn't have a great deal of easily-measurable economic value.
  - blunte 6y ago
    Is an education un-exercised worth having? The experience of getting the education probably has some (hopefully positive) impact on the individual, but if there is no real opportunity to use that education later, there may also be some psychological downsides. Not entirely related, but also worth pondering is the brain drain of diverse intellectual talent into the world of finance, particularly private investment. What would the overall benefit been if the dozens of MIT physics and chemistry grads used their education to make things, make discoveries, etc. instead of making money for a limited group of beneficiaries in finance?
    - skohan 6y ago
      Finance and consulting.
    - danaris 6y ago
      > Is an education un-exercised worth having? I am glad to know many things that will (most likely) never help me earn more money. The value of an education cannot be measured entirely in economic terms. Two aspects of this that are very important, and have been sadly neglected and devalued in recent decades, are civics and critical thinking. > also worth pondering is the brain drain of diverse intellectual talent into the world of finance Yeah, that depresses me every time I think about it.
      - blunte 6y ago
        Let's say that an individual gets the recommended education and is given enough loans to leave school with 60+k in debt. Unless that person is able to get a _really_ good job, this debt will sap any momentum they might have otherwise developed by living wisely and saving/investing. Now since for better or worse, people are driven to form partnerships and create offspring, and this will likely occur before that student debt is paid off, what kind of start will the children have? Will the parents be saving for their children's college funds? The value of critical thinking and ability to learn is great, but for most people in the above situation it will not compensate for the financial situation they will find themselves in for many years after they've forgotten much of what they learned. Also, the stress of their financial situation will actually have a greater influence on how they think than what they learned in school.

skohan 6y ago

> So what's happening is this artificial grouping "college graduate" has massively expanded, whilst maintaining its average. That's a remarkable increase in wealth for the 40% "left out" three decades ago. You are leaving the cost of education out of the equation, which has increased massively over the past 30 years. Most Americans graduate under a mountain of debt. If salaries have remained stagnant, for the 10% who would have been that amounts to a net lower salary, at least for the first X years of employment until the debt is paid off. For the other 40%, they might have had the option to go work in a steel mill or an auto plant with a high-school degree, and now they have to go to university, and acquire a massive debt to have a hope of competing for a job outside the service industry. I'm not so convinced this is a net win for anyone involved. > Let's be clear. The top 1% in 1950 lived more differently than the rest of society in 1950; more so than the top 1% do of society today. Today the top 1% live much more like the top 10% who live much more like the top 50%, and so on. I'm also not so convinced this is the case. If you want to make the argument that I am living like Jeff Bezos because we can both have an LCD TV and and iPad, I think this is a very shallow argument. While the cost of consumer goods has not risen significantly in the past few decades, the cost of the markers of a middle-class existence absolutely have. For instance, due to the increased cost of housing, the rate of home ownership among millennials is much lower than that of previous generations. Due to student loan debt and the high cost of healthcare, many young people who might have risked leaving a 9-to-5 job to start a business don't feel safe to do so. Low cost consumer goods are nice, but the "American Dream" has always been about owning your own future, and being able climb into the next social class above your origins with hard work and ingenuity. Due to income inequality, the price of getting a seat at the table is what has increased out of the reach of almost everyone.

danaris 6y ago
To be fair, it is a net win for the overall education of our country. That's not something to just dismiss—but it doesn't have a great deal of easily-measurable economic value.
- blunte 6y ago
  Is an education un-exercised worth having? The experience of getting the education probably has some (hopefully positive) impact on the individual, but if there is no real opportunity to use that education later, there may also be some psychological downsides. Not entirely related, but also worth pondering is the brain drain of diverse intellectual talent into the world of finance, particularly private investment. What would the overall benefit been if the dozens of MIT physics and chemistry grads used their education to make things, make discoveries, etc. instead of making money for a limited group of beneficiaries in finance?
  - skohan 6y ago
    Finance and consulting.
  - danaris 6y ago
    > Is an education un-exercised worth having? I am glad to know many things that will (most likely) never help me earn more money. The value of an education cannot be measured entirely in economic terms. Two aspects of this that are very important, and have been sadly neglected and devalued in recent decades, are civics and critical thinking. > also worth pondering is the brain drain of diverse intellectual talent into the world of finance Yeah, that depresses me every time I think about it.
    - blunte 6y ago
      Let's say that an individual gets the recommended education and is given enough loans to leave school with 60+k in debt. Unless that person is able to get a _really_ good job, this debt will sap any momentum they might have otherwise developed by living wisely and saving/investing. Now since for better or worse, people are driven to form partnerships and create offspring, and this will likely occur before that student debt is paid off, what kind of start will the children have? Will the parents be saving for their children's college funds? The value of critical thinking and ability to learn is great, but for most people in the above situation it will not compensate for the financial situation they will find themselves in for many years after they've forgotten much of what they learned. Also, the stress of their financial situation will actually have a greater influence on how they think than what they learned in school.