[Big Mac]

The current huge talking point of the Left is that the top 1% has benefited in an extremely disproportionately way and has seen its income vastly expand while the rest of the country has not seen income growth, with the implication being that the top 1% is exploiting the rest of us or not paying its "fair share." This propaganda is The President loves to make this claim, and it's going to be a centerpiece of his scorched earth, class war reelection campaign. Since President Obama cannot run on his Stimulus, which was mostly corrupt pork and utterly failed even by the White House's standards, and since he cannot run on Health Care Reform which is mostly a corrupt bureaucratic regulatory nightmare that has failed to "bend the cost curve" anywhere but upward, Obama's going to run hard as a populist seeking to punish the rich on behalf of the rest of the country. The GOP better be ready with facts to challenge these assertions. And surprisingly, the liberal English economics magazine The Economist provides strong ammunition for the Right:

The inequality myth: Is rising inequality in America exaggerated? | The Economist

Originally Posted by The Economist (excerpted)

Mr Gordon's surprising conclusion is based upon recent studies showing that measured income inequality has been overstated due to inadequacies in traditional methods for constructing price indices and estimating real income. In the latest version of a much-discussed paper Christian Broda and John Romalis find that, "the relative prices of low-quality products that are consumed disproportionately by low-income consumers have been falling over this period. This fact implies that measured against the prices of products that poorer consumers actually buy, their “real” incomes have been rising steadily. As a consequence, we find that around half of the increase in conventional inequality measures during 1994–2005 is the result of using the same price index for non-durable goods across different income groups."
Many popular narratives about inequality are grounded on the alleged fact that wages and incomes at the middle and bottom of the distribution have been stagnant for decades. It appears that this, too, may be an artefact of insufficiently sophisticated methods for building the price indices used to calculate rates of inflation. Using an updated price index, Christian Broda, Ephraim Leibtag, and David Weinstein find that, "the real wages at the 10th percentile increased by 30 percent from 1979 to 2005. In other words, the real wages of low earners have not remained stagnant, as suggested by conventional measures, but actually have been rising on average by around 1 percent per year."

So far the Republicans haven't really defended their underbelly on this issue. Taxing those fat cats is a very popular notion during times of economic distress, and it's not enough to say that raising taxes during a weak economy is a bad idea. Sure, the rich normally get richer because they have large amounts of capital at their disposal and are good at making more. However, the wealthiest individuals today have wealth that is dwarfed by the wealthiest men of the early industrial age. Just look it up. (I've seen people argue here that despite the calculations of modern equivalent of wealth of a Henry Ford at $188 Billion, those calculations ignore that back when he was alive Ford's wealth disparity wasn't as large as the wealth disparity between modern corporate heads and regular workers. I don't see how that's possible or credible.) And sure, we do need fundamental tax reform because corporate dodges that allow multi-nationals to pay next to nothing while my small businesses get taxed through the nose are highly destructive. But given that we know the playbook of Barack Obama and his Democratic Socialist party in 2012, Republicans have to get a lot more sophisticated and stronger on the issue. And we need a president who can articulate that the middle class has also benefited, as the Economist points out, and that a rising economic tide lifts all boats. Confiscatory taxation to support an ever growing enormous federal Leviathan and to redistribute tremendous amounts of wealth to favored Entitled classes of Americans is all the Democrats know, and that's the path to economic destruction, not prosperity. The left-wing Economic model of the last year of Bush and of Barack Obama has utterly failed, and America needs a real, fiscally conservative, pro-private growth alternative.

[SpaceMonkey]

So, it's overstated because poor people can still afford the crap they were able to before? Meanwhile, while "real wages at the 10th percentile increased by 30 percent," wages of low earners were not in fact zero, but a whopping 1%?

I agree that "the left" has probably overstated their case too, but this attempt was just poor, Big Mac.

[Big Mac]

Poor? If it's poor in your book your beef is with The Economist, not me. I don't consider my attempt poor at all, SpaceMonkey. Maybe you need to get out of DC.

[SpaceMonkey]

My beef is that you think this is "strong ammunition for the Right." I don't see how it refutes the notion that income for the top tier has risen dramatically and income for the bottom tiers has not.

[Uncle Skeleton]

So to sum up, even though wages have been stagnant or declined, the buying power of those wages has still increased due to a plunge in the costs of goods both necessary and discretionary. I totally agree. However, this doesn't distinguish rich from poor. The rich are just as able to find today's smokin' hot deals, and this same effect would turn their already ample bounty into an even ampler bounty. The inequality would be merely scaled, not reversed. What am I missing here?

Originally Posted by Big Mac 

Poor? If it's poor in your book your beef is with The Economist, not me.

Did you happen to notice the substring "blogs" in the URL of your link? I think his beef is with Walter White (or Walt Whitman)

[screener]

Originally Posted by Big Mac 

The current huge talking point of the Left is that the top 1% has benefited in an extremely disproportionately way and has seen its income vastly expand while the rest of the country has not seen income growth, with the implication being that the top 1% is exploiting the rest of us or not paying its "fair share." This propaganda is The President loves to make this claim, and it's going to be a centerpiece of his scorched earth, class war reelection campaign. Since President Obama cannot run on his Stimulus, which was mostly corrupt pork and utterly failed even by the White House's standards, and since he cannot run on Health Care Reform which is mostly a corrupt bureaucratic regulatory nightmare that has failed to "bend the cost curve" anywhere but upward, Obama's going to run hard as a populist seeking to punish the rich on behalf of the rest of the country. The GOP better be ready with facts to challenge these assertions. And surprisingly, the liberal English economics magazine The Economist provides strong ammunition for the Right:

The inequality myth: Is rising inequality in America exaggerated? | The Economist


So far the Republicans haven't really defended their underbelly on this issue. Taxing those fat cats is a very popular notion during times of economic distress, and it's not enough to say that raising taxes during a weak economy is a bad idea. Sure, the rich normally get richer because they have large amounts of capital at their disposal and are good at making more. However, the wealthiest individuals today have wealth that is dwarfed by the wealthiest men of the early industrial age. Just look it up. (I've seen people argue here that despite the calculations of modern equivalent of wealth of a Henry Ford at $188 Billion, those calculations ignore that back when he was alive Ford's wealth disparity wasn't as large as the wealth disparity between modern corporate heads and regular workers. I don't see how that's possible or credible.) And sure, we do need fundamental tax reform because corporate dodges that allow multi-nationals to pay next to nothing while my small businesses get taxed through the nose are highly destructive. But given that we know the playbook of Barack Obama and his Democratic Socialist party in 2012, Republicans have to get a lot more sophisticated and stronger on the issue. And we need a president who can articulate that the middle class has also benefited, as the Economist points out, and that a rising economic tide lifts all boats. Confiscatory taxation to support an ever growing enormous federal Leviathan and to redistribute tremendous amounts of wealth to favored Entitled classes of Americans is all the Democrats know, and that's the path to economic destruction, not prosperity. The left-wing Economic model of the last year of Bush and of Barack Obama has utterly failed, and America needs a real, fiscally conservative, pro-private growth alternative.

Another lesser winger's well thought out thread.

[BadKosh]

There are reasons some people are at the bottom of the food chain.
Lazy, Druggies, chose wrong career, personal/emotional issues, no education, bad luck.

Becoming rich is as much about luck as it is talent, timing and bucks.
most people are too scared to try.

[olePigeon]

Originally Posted by Uncle Skeleton 

So to sum up, even though wages have been stagnant or declined, the buying power of those wages has still increased due to a plunge in the costs of goods both necessary and discretionary. I totally agree. However, this doesn't distinguish rich from poor. The rich are just as able to find today's smokin' hot deals, and this same effect would turn their already ample bounty into an even ampler bounty. The inequality would be merely scaled, not reversed.

Exactly. The Heritage Foundation used the same reasoning, but it was more amusing because their spokesman actually got irritated that the poor aren't more grateful to rich people.

Section 8 housing often includes an air conditioner, dish washer, clothes washer and dryer, and a refrigerator. The people going into those homes are poor. Now that they own those "luxury" items, that doesn't make them any less poor, it just means those items are cheap enough to be included in social programs.

The rich do take advantage of tax loopholes. No, it's not technically illegal, but it is unfair because only rich people (and larger corporations) can afford to take advantage of said loopholes. And no, they don't pay their fair share in income taxes. They're gaming the tax system at the expense of people who earn a living.

[Big Mac]

5 reasons why income inequality is a myth — and Occupy Wall Street is wrong � The Enterprise Blog

[imitchellg5]

I would like to posit the idea that increasing inequality may be a myth, but the gap is more visible now than it has been before due to technology and material items.

[Big Mac]

I find that to be a very a plausible notion, mitch. And the distinction is more harshly felt in a period of very slow economic growth and high unemployment.

[Shaddim]

Originally Posted by imitchellg5 

I would like to posit the idea that increasing inequality may be a myth, but the gap is more visible now than it has been before due to technology and material items.

People in the lowest income brackets have more material items and better access to technology than ever before. Every day I see people swiping their EBT cards at Kroger while texting on cutting edge phones and wearing $100 Nikes. There's a disparity in income, but they do seem to be able to afford some pretty nice things.

[Shaddim]

Originally Posted by Big Mac 

5 reasons why income inequality is a myth — and Occupy Wall Street is wrong � The Enterprise Blog

Bookmarked that page, very telling stuff there.

[The Final Dakar]

Originally Posted by Shaddim 

People in the lowest income brackets have more material items and better access to technology than ever before. Every day I see people swiping their EBT cards at Kroger while texting on cutting edge phones and wearing $100 Nikes. There's a disparity in income, but they do seem to be able to afford some pretty nice things.

Isn't this an illusion covered up by credit card debt?

[Shaddim]

Originally Posted by The Final Dakar 

Isn't this an illusion covered up by credit card debt?

Dunno, they usually will pay for non-food things from a big roll of cash in their pocket, and then whip out the EBT for the $10 in groceries.

[The Final Dakar]

Originally Posted by Shaddim 

Dunno, they usually will pay for non-food things from a big roll of cash in their pocket, and then whip out the EBT for the $10 in groceries.

Why do I imagine illicit income in this picture?

[Shaddim]

Originally Posted by The Final Dakar 

Why do I imagine illicit income in this picture?

Without judging them, you could be right. Either money earned under the table or by selling illegal, or illegally attained, items.

[SpaceMonkey]

Plenty of poor people also opt to use check cashing stores over bank accounts (even if they already have bank accounts) for various reasons.

Poor often don’t know benefit of banks - Boston.com

[Athens]

Originally Posted by Shaddim 

People in the lowest income brackets have more material items and better access to technology than ever before. Every day I see people swiping their EBT cards at Kroger while texting on cutting edge phones and wearing $100 Nikes. There's a disparity in income, but they do seem to be able to afford some pretty nice things.

And of course you discount gifts, sales, and other possible reasons they have what they have. Besides material items are not a indicator of well off some one is. % of what goes into shelter, food, fuel, and whats left is a indicator of how well off some one is. if 60% of some ones income goes to shelter, there is already a problem right there.

[Uncle Skeleton]

The cheapest way to have nice things is to be nearby someone who has nice things. You get their leftovers and cast-offs. Not all areas have rich people, so any rich person's perspective is going to be biased by the fact that they only observe poor people who happen to live near rich people. Two poor people with identical "income" will have vastly different standard of living, if one lives in 90120 and the other lives in 17932

[olePigeon]

Originally Posted by Uncle Skeleton 

Two poor people with identical "income" will have vastly different standard of living, if one lives in 90120 and the other lives in 17932

Damn their 90120 zip code. They think they're all special with their non-existant zip code.

[Shaddim]

Originally Posted by uncle skeleton 

two poor people with identical "income" will have vastly different standard of living, if one lives in 90210 and the other lives in 17932

ftfy

Of course, being at the poverty level and having a legit residence in Beverly Hills would be quite a feat.

[Uncle Skeleton]

damn this second-hand keyboard with its jumbled keys!

[Wiskedjak]

Originally Posted by Shaddim 

People in the lowest income brackets have more material items and better access to technology than ever before. Every day I see people swiping their EBT cards at Kroger while texting on cutting edge phones and wearing $100 Nikes. There's a disparity in income, but they do seem to be able to afford some pretty nice things.

ummm ... debt doesn't equal income.