4 ms·
> Now inequality is high and keeps getting higher. Gramm et al's book, or at least the first couple of chapters, are worth reading on this topic. Oft-quoted of
by RhysU 1y ago
> Now inequality is high and keeps getting higher.
Gramm et al's book, or at least the first couple of chapters, are worth reading on this topic. Oft-quoted official statistics neglect taxes and transfer payments. There is definitely a large uptick at the top 5% but the spread across the lower 80% isn't as strong as it often is stated, according to Gramm and his co-authors.
https://en.wikipedia.org/wiki/The_Myth_of_American_Inequality https://en.wikipedia.org/wiki/The_Myth_of_American_Inequalit...
- deleted 1y ago[deleted]
- jollyllama 1y agoThat doesn't necessarily negate the point that inequality is high and keeps getting higher. It all depends on what your definition of inequality is. Ironically, it is the transfer payments which Gramm decrees that wind up enriching that top 5% the most, they are basically farming the lower classes to line their pockets at the expense of the middle and upper middle, who pay a disproportionate share of the taxes.
- deleted 1y ago[deleted]
- mempko 1y agoRobert Ekelund, one of the authors, wrote pro-smoking articles for the tobacco industry. It's hard to trust someone like that and any data they present. It would take a lot of work to read those chapters and not only confirm the data they present, but also find data they aren't presenting, or deliberately omitting to make their case. Is there another book making the same argument that doesn't have this baggage?
- deleted 1y ago[deleted]
- RhysU 1y agoYes, one such book is Thomas Sowell's "Basic Economics" 5th Edition. Page 209 says... > A simultaneous rise in rewards for work and a growing welfare state that allows more people to live without working virtually guarantees increasing inequality and earnings and incomes, when many of the welfare state benefits are received in kind rather than in money, such a subsidized housing or subsidized medical care, since those benefits are not counted in income statistics.
- mempko 1y agoSo he's arguing that inequality increases with the welfare state? Doesn't that contradict the claim made earlier? Or am I misunderstanding the quote?
- RhysU 1y agoSowell's arguing that neglecting to include welfare transfers makes inequality look worse than it is. Especially when there are stark differences in earnings as a consequence of working. If you earn $5 and the state gives you $45 in assistance, you practically have $50. If I earn $200 and the state taxes me $100, then I practically have $100. The income inequality is 40x but the practical inequality is 2x. Current common metrics would report 40x, in this contrived example, is the point Gramm and Sowell both make. Their observation that transfers and taxes are neglected when measuring income inequality is self-evidently true and frequently overlooked. Be careful with income inequality conclusions. The first chapter of Gramm's book calls out that difference between the hours worked in the various income quantiles is large. Sowell makes the point that the age demographics vary considerably across the quantiles with very young and very old people working less and therefore frequently in the lower quantiles. Sowell further points out that different US demographic groups have different mean ages so that one can explain some seemingly-demographic-related inequality by age differences. Both books are recommended.