7 ms·

Top 1% take biggest income slice on record

28 points by reillyse 13y ago

deleted 13y ago
[deleted]
eliben 13y ago
All drama and no interesting data. They could at least quote some numbers (what's the 1% income, what's the median income, etc), graphs of historic trends, breakdowns by state or whatever. Otherwise it's just an extended headline.
tenpoundhammer 13y ago
At this state in our economy, those with the most resources have the best chance to get even more resources with little to no effort. Assuming they wish to do so. We could easily squash this by reducing investment activities that don't generate economic value, including certain types of stock trading, derivatives, most kinds of futures trading, and by forcing more fair lending practices(which lending does generate positive economic value, but can be a long term binder of the poor). I'm not sure there won't be unintended consequences by implementing regulations in this area. But it would help to flatten the income inequality curve while also lowering prices and increasing stability of common goods like oil, corn, and whatever else people are betting in the futures markets.
clarkmoody 13y ago
Income inequality is not the disease. It's a symptom of other issues. A better indicator of economic health is to look at changes in the individuals with highest net worth. In countries with government-granted monopolies, the list remains relatively constant year upon year. In more competitive countries, the list churns new wealth in with the old. I do wish we could get over this "1% vs 99%" meme though. Incomes are mostly continuous as you go up the scale. The change in annual income / net worth of the bottom guy in "the 1%" and the top guy in the "the 99%" is immaterial. If the article is warning us that we're on the brink of a Depression, mentioning the 1927 stats, I would like to see some sort of charts showing this 1% slice over time[1]. And for "the rest of us," it isn't the fault of "the 1%" that median incomes haven't matched productivity gains over the last 40 years[2]. This is where more scholarly work should be focused, in my opinion. Basically, it doesn't matter how much wealth the top earners have, as long as the median income is growing. The headline and article are simply engendering class warfare instead of examining the deeper causes of median income stagnation. [1] http://en.wikipedia.org/wiki/File:2008_Top1percentUSA.png http://en.wikipedia.org/wiki/File:2008_Top1percentUSA.png [2] http://upload.wikimedia.org/wikipedia/commons/4/45/Productivity_and_Real_Median_Family_Income_Growth_1947-2009.png http://upload.wikimedia.org/wikipedia/commons/4/45/Productiv...
- eli_gottlieb 13y ago
  And for "the rest of us," it isn't the fault of "the 1%" that median incomes haven't matched productivity gains over the last 40 years[2]. Who says? The top 1%, in any given year, mostly consist of capitalists (literally: people who invest capital for a living) or rentiers (people who control commons resources like land or mineral wealth). The top industrial sectors, often the only healthy sectors, in most of the developed world, are now: FIRE (Finance, Insurance, and Real Estate), Resource Extraction (basically: energy and raw materials), and technology (us on this site). Income has always been divided between capital, labor, and rentiering (even though economists like to operate in a True Scotsman Efficient Market, where rentiering is eliminated by perfect competition). Recently, more and more of that income has been going to capital and rent, less to labor [1]. "Since labor income is more evenly distributed across U.S. households than capital income, the decline made total income less evenly distributed and more concentrated at the top of the distribution, and this contributed to increased income inequality." So actually, what we are seeing is very much class warfare, in the Marxist sense of the word. Even the tax system (normally the tool of obnoxious redistributive Big Government) is now configured to favor capital over labor [2], contributing to income inequality, the deterioration of national infrastructure, and the accumulation of national debts. “There’s class warfare, all right,” Mr. Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning.” [1] -- http://www.clevelandfed.org/research/commentary/2012/2012-13.cfm http://www.clevelandfed.org/research/commentary/2012/2012-13... [2] -- http://www.nytimes.com/2006/11/26/business/yourmoney/26every.html?_r=0 http://www.nytimes.com/2006/11/26/business/yourmoney/26every...
  - rayiner 13y ago
    I have to say I really enjoy your posts that discuss things in plain labor/capital terms. It seems to be out of vogue, but you don't have to be Marxist to appreciate that the basic dynamic of labor versus capital is simply a description of reality.
    - eli_gottlieb 13y ago
      Well thanks ^_^.
tzs 13y ago
These kind of stories annoy me, because none of them ever give me enough information to understand the significance of their numbers. In any wealth distribution other than everyone having the exact same wealth, it is mathematically necessary that the top X% have more than X% of the wealth. The same observation applies within wealth groups, so for example the top 25% of the middle third wealth group must have more than 25% of that group's wealth unless everyone in that group has exactly the same wealth. When you apply this recursively, things accumulate at the top and and the bottom end. For instance, if within each wealth group the top 50% has 60% (which seems to me likely to be flatter than reality), then for the whole group the top 1% would have 5.6% of the wealth. If the top 50% of each group has 75% of that group's wealth, then the top 1% of the whole group would have 19.7% of the overall wealth. Given this, I have no idea whatsoever whether I should react to this kind of article with outrage or indifference.
- fewy 13y ago
  This is pretty good math work. Take a look at the actual data below. Shares of Household Income by Quintile, 2011 Quintile Share Lowest quintile 3.2 Second quintile 8.4 Third quintile 14.3 Fourth quintile 23.0 Highest quintile 51.1

28 points by reillyse 13y ago

deleted 13y ago

[deleted]

All drama and no interesting data. They could at least quote some numbers (what's the 1% income, what's the median income, etc), graphs of historic trends, breakdowns by state or whatever. Otherwise it's just an extended headline.

tenpoundhammer 13y ago

At this state in our economy, those with the most resources have the best chance to get even more resources with little to no effort. Assuming they wish to do so. We could easily squash this by reducing investment activities that don't generate economic value, including certain types of stock trading, derivatives, most kinds of futures trading, and by forcing more fair lending practices(which lending does generate positive economic value, but can be a long term binder of the poor). I'm not sure there won't be unintended consequences by implementing regulations in this area. But it would help to flatten the income inequality curve while also lowering prices and increasing stability of common goods like oil, corn, and whatever else people are betting in the futures markets.

clarkmoody 13y ago

Income inequality is not the disease. It's a symptom of other issues. A better indicator of economic health is to look at changes in the individuals with highest net worth. In countries with government-granted monopolies, the list remains relatively constant year upon year. In more competitive countries, the list churns new wealth in with the old. I do wish we could get over this "1% vs 99%" meme though. Incomes are mostly continuous as you go up the scale. The change in annual income / net worth of the bottom guy in "the 1%" and the top guy in the "the 99%" is immaterial. If the article is warning us that we're on the brink of a Depression, mentioning the 1927 stats, I would like to see some sort of charts showing this 1% slice over time[1]. And for "the rest of us," it isn't the fault of "the 1%" that median incomes haven't matched productivity gains over the last 40 years[2]. This is where more scholarly work should be focused, in my opinion. Basically, it doesn't matter how much wealth the top earners have, as long as the median income is growing. The headline and article are simply engendering class warfare instead of examining the deeper causes of median income stagnation. [1] http://en.wikipedia.org/wiki/File:2008_Top1percentUSA.png http://en.wikipedia.org/wiki/File:2008_Top1percentUSA.png [2] http://upload.wikimedia.org/wikipedia/commons/4/45/Productivity_and_Real_Median_Family_Income_Growth_1947-2009.png http://upload.wikimedia.org/wikipedia/commons/4/45/Productiv...

eli_gottlieb 13y ago
And for "the rest of us," it isn't the fault of "the 1%" that median incomes haven't matched productivity gains over the last 40 years[2]. Who says? The top 1%, in any given year, mostly consist of capitalists (literally: people who invest capital for a living) or rentiers (people who control commons resources like land or mineral wealth). The top industrial sectors, often the only healthy sectors, in most of the developed world, are now: FIRE (Finance, Insurance, and Real Estate), Resource Extraction (basically: energy and raw materials), and technology (us on this site). Income has always been divided between capital, labor, and rentiering (even though economists like to operate in a True Scotsman Efficient Market, where rentiering is eliminated by perfect competition). Recently, more and more of that income has been going to capital and rent, less to labor [1]. "Since labor income is more evenly distributed across U.S. households than capital income, the decline made total income less evenly distributed and more concentrated at the top of the distribution, and this contributed to increased income inequality." So actually, what we are seeing is very much class warfare, in the Marxist sense of the word. Even the tax system (normally the tool of obnoxious redistributive Big Government) is now configured to favor capital over labor [2], contributing to income inequality, the deterioration of national infrastructure, and the accumulation of national debts. “There’s class warfare, all right,” Mr. Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning.” [1] -- http://www.clevelandfed.org/research/commentary/2012/2012-13.cfm http://www.clevelandfed.org/research/commentary/2012/2012-13... [2] -- http://www.nytimes.com/2006/11/26/business/yourmoney/26every.html?_r=0 http://www.nytimes.com/2006/11/26/business/yourmoney/26every...
- rayiner 13y ago
  I have to say I really enjoy your posts that discuss things in plain labor/capital terms. It seems to be out of vogue, but you don't have to be Marxist to appreciate that the basic dynamic of labor versus capital is simply a description of reality.
  - eli_gottlieb 13y ago
    Well thanks ^_^.

tzs 13y ago

These kind of stories annoy me, because none of them ever give me enough information to understand the significance of their numbers. In any wealth distribution other than everyone having the exact same wealth, it is mathematically necessary that the top X% have more than X% of the wealth. The same observation applies within wealth groups, so for example the top 25% of the middle third wealth group must have more than 25% of that group's wealth unless everyone in that group has exactly the same wealth. When you apply this recursively, things accumulate at the top and and the bottom end. For instance, if within each wealth group the top 50% has 60% (which seems to me likely to be flatter than reality), then for the whole group the top 1% would have 5.6% of the wealth. If the top 50% of each group has 75% of that group's wealth, then the top 1% of the whole group would have 19.7% of the overall wealth. Given this, I have no idea whatsoever whether I should react to this kind of article with outrage or indifference.

fewy 13y ago
This is pretty good math work. Take a look at the actual data below. Shares of Household Income by Quintile, 2011 Quintile Share Lowest quintile 3.2 Second quintile 8.4 Third quintile 14.3 Fourth quintile 23.0 Highest quintile 51.1