Tuesday, April 19, 2011

"The Rich Aren't Getting Richer"

That's the title of an article by Kevin D. Williamson in the National Review Online. Here's an excerpt.

Are the rich really getting richer? That’s a pretty standard line from the Left, a lament usually cited in the course of calling for higher tax rates. Robert Reich is particularly fond of this mode of attack: A recent post of his was headlined, "For 70 years, the wealthy have grown wealthier". Professor Reich probably doesn’t write his own headlines, but it’s a common enough sentiment for him, and his prose is rich with phrases such as "the super-rich got even wealthier this year".

He isn’t alone in employing this mode. Take this from an April 7 Salon article: "And surely the rich don’t need that 25 percent top rate in the way poor folks need programs like TANF and seniors need Medicare - about 90 percent of all American income gains since the 1970s have gone to the top 10 percent of earners."

This is not true.

The numbers generally cited in support of this argument do not actually tell us much about what has happened to the incomes of wealthy households over time. That’s because the people who are in the top bracket today are not the people who were in the top bracket last year. There’s a good deal of socioeconomic mobility in the United States - more than you’d think. Our dear, dear friends at the IRS keep track of actual households (boy, do they ever!), and sometimes the Treasury publishes data about what has happened to them. For instance, among those who in 1996 were in the very highest income group isolated for study - the top 0.01 percent - 75 percent were in a lower income group by 2005. The median real income of super-rich households went down, not up. The rich got poorer. Among actual households, income grew proportionally more for those who started off in the low-income groups than those that began in high-income groups.

. . .

About 50 percent of U.S. households move from one income group to a different one every decade, and actual households initially in the low-income groups see proportionally more income growth than do actual households initially in the high-income groups.

When somebody says that that top 1 percent saw its income go up by X in the last decade, they are not really talking about what happened to actual households in the top 1 percent. Rather, they are talking about how much money one has to make to qualify for the top 1 percent. All that really means is that the 3 million highest-paid Americans in 2010 made more money than did the 3 million highest-paid Americans in 2000 ... But, as the Treasury data show: They are not the same people.

There's more at the link.

Mr. Williamson has an interesting perspective on the "rich vs. poor" issue. If he's right, it suggests that a great deal of the vitriol directed against "the rich" is, at best, as excessive as their alleged consumption patterns. However, I'm sure that proponents of such vitriol will rapidly try to debunk his argument, and provide "facts" and "figures" to "prove" that the rich are, in reality, greedy, selfish, and the enemies of "the people".

Marx, from his grave, will doubtless approve (his grave being perhaps the only remaining, genuine Communist plot!).



Nebris said...

The talk of 'households' is simplistic BS. As if the wealthy keep their money in personal chequeing. *laughs* They pay their accountants well and stash their money in corporations and holding companies and offshore accounts and myriad other places.

They also pay people to write this type of propaganda to provide political cover to the politicians they own and to 'inspire' numerous fools who think that 'one day I'll be rich too' into arguing against against their own best interests.

Shrimp said...

"They pay their accountants well and stash their money in corporations and holding companies and offshore accounts and myriad other places."

So, they pay accountants (provide jobs) and "stash" money in corporations (buy stock and invest money, providing those companies with revenue to do business) and other places (that likely provide a better return on their investment than keeping it here in the US as a liquid asset that can be taken away in the form of taxes).

I fail to see what's wrong with that.

So, if they ARE actually paying someone to write this "propaganda" then they are supporting someone, as in, providing a job. Is that bad? Are jobs bad?

And how is it in anyone's best interest to cause a person who has money to be less wealthy (via taxes or other income redistibution), especially if that money isn't going to me, but to a government (via taxes) that will spend it on things I don't want them to spend it on?

Whose money is it, anyway?

You come across as an envious person, Nebris.

Nebris said...

You come across as an envious person Ah, yes, parrot standard the Corporatist talking points and then attack the messenger...all while getting buggered by your rulers.

So, how would you characterize GE making $14.2 billion in profits last year while simultaneously claiming $3.2 billion in tax credits, eh? Just good old capitalism at work I guess.

BTW How much did you pay in taxes this week? *laughs*

Nebris said...

PS I suppose today being his birthday, it would be ok to mention that Hitler also provided full employment. *smirk*

Shrimp said...

...it would be ok to mention that Hitler also provided full employment...
Wow, you went straight for the "Godwin," didn't you.....

Normally, that ends the conversation and you "winz the internetz" for the day, but I'll play for a moment longer.

How much did you pay in taxes this week?
I don't wait until the deadline to file, if that's what you mean. As far as how much I pay in taxes, I will always answer "too much." If I could find a way to get the government to take less, I would. I take every deduction I can, too.

I kind of take the Dave Barry approach (during the Reagan years, anyway): the government is just going to waste it anyway, so I should give them as little as possible to spend.

I think that's a pretty good philosophy, actually. Besides, it not their money, it's mine. What you earned, you should get to spend, with as little as possible going to the government to misspend.

"Just good old capitalism at work I guess"

Did you miss the part where GE took advantage of the loopholes provided to them in the tax codes, because it would stupid for them not to take advantage of those loopholes? Their shareholders are holding them accountable. The shareholders expect them to remain profitable, and return money for their investment. That's how investing works. One of the ways a company stays profitable (especially when corporate taxes are as high as the US corporate tax) is to find and take advantage of every tax loophole written into the convoluted and complicated tax code.

Do you not take every deduction you can on your taxes? Are you evil or bad for doing so? If you owned a business and took every possible exemption, deduction and loophole, would you suddenly be bad for doing so?

How many people does GE employ? How many less people could GE employ if they had to pay $3.2B more in taxes? Is putting people out of a job somehow going to help the economy?

Tearing down another doesn't build you up, whether we're talking character, or feelings or money. Making GE pay more in taxes won't make you (or the rest of America) better off. It'll only hurt more people by putting people out of work.

You say I'm attacking the messenger. I'm just calling a spade, a spade.

perlhaqr said...

So, how would you characterize GE making $14.2 billion in profits last year while simultaneously claiming $3.2 billion in tax credits, eh? Just good old capitalism at work I guess.

Since most of those "tax credits" are for BS "green energy" crap the government is trying to encourage, no, that's not really good old capitalism at work.

But as for the $14.6B in profits... so what? You might think that "making profits" is evil, but I think I'm safe in saying that this perspective on the subject is not shared by many of the commenters here.

So you saying "Ha! They made profits!" just inspires us to go "Yeah, so?"

Well, no wonder you are so enamoured of the government then, since they managed to not only not turn a profit last year, but rather racked up $1.17 Trillion in additional debt.

all while getting buggered by your rulers.

You mean the government? At tax time? Amazing, you actually got one right, though apparently it was purely unintentionally.

Nebris said...

“The mastery of the political right over the past thirty years has been primarily to better understand the irrational factors in politics. Conservatives have always understood that when it comes to politics, people rarely act in their rational self-interest but instead on emotion, fears and the perception of their interests.”


Nebris said...

...as for the rest of this debate, see here: http://nebris.livejournal.com/tag/ayn%20rand *grin*

Shrimp said...

No, oh wise sage, if you have something to add, bring it here. I'd rather not double your hits count by visiting your site.

Nebris said...

As my 'site' in not monetized - Live Journal forbids that - hit counts are pretty much irrelevant to me. But that shows your mind set, knowing the price of everything and the value of nothing.

I said my peace. Don't want to look at my LJ? *shrug* I don't really care in the long run. You're not my target demographic anyway.

Nebris said...

PS This just showed up on one of my news feeds:

Letting Bush tax cuts expire would solve 75% of deficit over next 5 years, 40% over 20 years
by John Aravosis (DC) on 4/13/2011 02:44:00 PM

I'm not terribly thrilled about paying more taxes, especially when we know the Republicans will simply take the money and declare a few more wars. But, it is interesting to see how much money we'd save by simply rolling back the Bush tax cuts and returning taxes to where they were during the prosperous Clinton era. NYT:

"If Mr. Obama wins re-election, he could simply refuse to sign any budget-busting tax cut for the rich — who, after all, have received much larger pretax raises than any other income group in recent years and have also had their tax rates fall more. Republicans, for their part, could again refuse to pass any partial extension.

And just like that, on Jan. 1, 2013, the Clinton-era tax rates would return.

This change, by itself, would solve about 75 percent of the deficit problem over the next five years. The rest could come from spending cuts, both for social programs and the military.

Over the longer term — 20 years — letting all of the Bush cuts lapse would close only about 40 percent of the budget gap. But 40 percent is a great start."

I had no idea the numbers were that large.


Nebris said...

And here's what the rich have planned for you: http://www.americablog.com/2011/04/more-on-financial-martial-law-from-big.html

Shrimp said...

We've seen those numbers before, only in a different setting. The basis for those imaginings comes from here:


And that exercise is flawed in what it allows to be cut, and in what ways. Example: the very first "cut" that can be made is "cut foreign aid in half."

Okay. Where's the one that cuts foreign aid completely? Where's the one that kills the entire dept of energy, the dept of education, the BATFEIEIO and a host of other worthless government slugs that suck up money put out nothing useful?

There's also some flaws in the numbers themselves. Earmarks account for only $14 Billion according to that page, yet the numbers available elsewhere (in news stories, and various sources) suggest that the number is at least $3B higher.

The formula they used to figure out how the deficit is reduced is heavily favored to tax increases having the most effect, yet the the 1980's show that reducing taxes actually increases revenue (that the government can then waste on stupid things instead of paying down the deficit) far more than tax increases.

Taxes are the cost of doing business. Raise the price of doing business, and there will be less business. Reduce the cost of doing business, and there will be more business. Sure, they get a smaller slice of each pie, but there will be far more pies made, resulting in a net gain.

All of which is irrelevant if we don't stop spending money. As long as the government continues to spend wrecklessly, we will never reduce the deficit.

Nebris said...
This comment has been removed by the author.
Nebris said...

As long as the government continues to spend wrecklessly[sic], we will never reduce the deficit.

Simple Solutions To The Budget Crisis:
End two wars of occupation­­­­­­­­­­­­­­. Leave the Middle East and Central Asia.
Stop fighting the Cold War. Leave Europe.
Start closing down America's world wide 'empire of bases'.
Stop funding the military power of other nations.
End all military contracts, and return all of those duties to the military itself.
Close Guantanamo and return Cuba's sovereign territory.
Stop subsidizin­­­­­­­­­­­­­­g the already highly profitable oil industry.
Stop subsidizin­­­­­­­­­­­­­­g the highly unprofitab­­­­­­­­­­­­­­l­e corn industry.
Nationalize the private prison industry.
Release all minor, non-violen­­­­­­­­­­­­­­t drug offenders and stop paying a fortune to incarcerat­­­­­­­­­­­­­­e them.
End the War on Drugs, dismantle the DEA, legalize all drugs, then regulate and tax them.
Establish a State Bank for each of the fifty states and have each state treasury deposit ALL state revenues, pension funds, etc 'exclusively' in their own State Bank.
Establish a national Single Payer 'buy in' program for Medicare with no age restrictions.
Extend a fully funded Medicaid to everyone below the poverty line.
Rebuild all of America's infrastruc­­­ture from the ground up.
Rebuild American industry here in America itself, by government fiat if necessary.
...and the biggest one, return to the sensible Eisenhower era taxation rate.

..the list needed an edit

Shrimp said...

Nice catch. Lesson:Don't type when you're tired or distracted.

As for the list--

Some of those things will help, and some will make it worse.

I'm all for ending the wars, closing bases and the boys (and girls) returning home.

Ending all military contracts is actually a bad idea. Private corporation (yes, those evil defense contractors) do things that the military cannot do, or cannot do properly. But I agree that the budgets there need to be cut.

Subsidization of every sort ought to be stopped.

Nationalizing the prison system is spending more money, not cutting it. Plus, government tends to be inefficient, so there will be more wasted money.

Ending the War on (some) Drugs absolutely is a good idea.

Letting the states control their own treasuries via their own stae banks is a valid idea.

Medicare/Medicaid need cut entirely. No use sending good money after bad.

Rebuilding our entire infrastructure would be costly (and worth it) but only after we've gotten a handle on the spending and deficit. One a list of a hundred things, that's about number fifty. Let's get 1 through 49 first.

Anything done by government fiat is a flat out loser. American "industry" will rebuild itself if we lower taxes and get the government the hell out of the way.

Rather than returning to a former era of taxes (but still using our complicated and convoluted tax code), scrap it entirely and follow the constitution, allowing the individual states to collect their taxes and send their owed money to the federal government. Either that, or establish a permanently capped national tax to replace the entire tax code.

Dad29 said...

The measure of "rich" has much, much more to do with 'wealth' than with 'income.'

In terms of 'wealth,' there isn't too much movement; the Kennedy family has been 'wealthy' for nigh unto 100 years now, as have the Heinzes, (etc.)

'Income' is transient.

Nebris said...

Let's address the 'lower taxes' myth right out of the gate:

Greg Mankiw, who served as chair of George Bush's Council of Economic Advisers, has flatly declared that the claim that broad-based tax cuts will raise tax revenue is not "credible." (An early edition of his economics textbook called the advisers who told Reagan otherwise "charlatans and cranks.")

Nebris said...

On the issue of nationalizing prisons. In a democracy all aspects of the Judicial System should be govt run. The very idea of a for-profit prison is an anathema to a free people, efficiency be damned.

But in that regard, the private systems always winds up costing more. The War on Drugs is a grand example. The Prison Industry supports that war and lobbies hard to keep it going because IT MAKES THEM MONEY. That it is ruining innocent lives, corrupting law enforcement and gutting the 4th Amendment is irrelevant to them. The Bottom Line is all that matters. This is a classic example of how Corporation destroy their hosts.

A more specific example is Arizona hr1017, their over the top Immigration bill. It has cost the state a fortune in lost revenues dues to boycotts, made the state a pariah and in the end will not pass Constitutional muster, costing Arizona substantial legal costs for nothing.

Corrections Corporation of America was behind both the creation of the specific text of legislation and the effort to pass said. Because all those extra incarcerations, no matter how they were finally adjudicated, no matter how many cost the state money for police overtime and civil rights lawsuits, all of them would be paid into CCA's coffers.

And this is not even getting into the vast internal corruption in for profit prisons were 'efficiency' really means 'doing it on the cheap'.

Nebris said...

Back to the 'lower taxes' mythology regarding Rebuild American industry here in America itself, by government fiat if necessary.

Capital will NEVER bring industry back here unless or until American workers will accept Third World wages. Period. Any belief otherwise is delusion.

Nebris said...

That should be Arizona sb1070.

Shrimp said...

Regarding: "Capital will NEVER bring industry back here unless or until American workers will accept Third World wages. Period. Any belief otherwise is delusion."

You must have missed the story in Arizona, where Sheriff Joe rounded up and arrested a bunch of illegal immigrants. The next day, there was a line of people lining up to take the jobs that people like yourself insist no American will take, at a rate for which no American will work. People with degrees, people with mortgages to pay, and mouths to feed.

The economy will self-correct, if we stop messing around and propping things up (subsidies) and interfering (stimulus packages).

The issues involved in this whole mess are a lot more complicated than one solution or another, but it can be boiled down rather effectively to this--no matter what else is happening, you cannot spend more than you make and let that go on forever.

We are spending too much. The deficit is growing, and interest on that debt is outpacing our ability to pay it back. That spells financial doom, whether we're talking as a household or as a nation.

As far as raising tax revenues or not through tax cuts, the issue is irrelevant as long as two things continue to happen--congress continues to spend recklessly and we make no attempt to pay down the debt now.

Either is bad enough; doing both is financial suicide.

Nebris said...

You must have missed the story in Arizona, where Sheriff Joe rounded up and arrested a bunch of illegal immigrants. The next day, there was a line of people lining up to take the jobs that people like yourself insist no American will take, at a rate for which no American will work. People with degrees, people with mortgages to pay, and mouths to feed.

Yeah, Third World jobs at Third World wages. You make my point for me.

What you clearly do not understand, nor do any of your fellow travelers, is that modern capital economies are based upon debt. Money is an entirely fabricated concept. It's worth whatever we believe it to be worth. That applies to precious metals, as well. We value them so they have Value.

The old Mercantilist paradigm was bounded by the amount of gold the various states had in their physical possession. But today that would be impossible. The vast majority of the modern world's 'wealth' does not even really exist. It is 'virtual wealth' that exists only in computers and comes and goes like thoughts.

That is how over $14 trillion vanished almost overnight back in last 2008. Of course, that had terrible real world consequences, but to those who 'play the market', it did not matter much at all. And most of those folks are doing just find again, rebuilding their castles in the sky.

This won't last. A few more crashes like that and there will be blood. And probably some other 'virtual economy' will slip into its place.

Nebris said...

"This report confirms our worst fears..."



Shrimp said...

"What you clearly do not understand, nor do any of your fellow travelers, is that modern capital economies are based upon debt. Money is an entirely fabricated concept. It's worth whatever we believe it to be worth. That applies to precious metals, as well. We value them so they have Value."

Wow, that's quite a carnival trick that you have there, being able to tell me what I know and understand. Is Dionne Warwick in your circle of friends?

I understand the concept perfectly well.

Gold is a mere metal, pretty to look at and precious to behold. It's malleable, and it conducts electricity fairly well.

Yet, I cannot eat it if I am hungry, nor drink it if I am thirsty, and I cannot use it to build a shelter, make a fire, or make clothes if I am cold. What is its value? Of what use is it?

It still has a value, though, because others will want it. It has an intrinsic value as a so-called precious metal, and it will always have a value to someone, even if it is not me.

The value of something is partly determined by its usefulness, and partly by its desirability. If someone offered me a brand new Toyota Prius (even though I don't want one), I'd be a fool to say no to it, because it still has some value (to someone). I would never go buy one, but I recognize that it still has a value. I could sell it, trade it, or drive it. It still has its intrinsic value as a car, despite it not being a car I want.

You are mostly right about money. It is a concept, a vehicle for commerce, based upon a value. The money is supposed to be the equivalent of some commodity, to be used in place of that commodity. Rather than carrying around sixty bushels of wheat to trade with someone, you can trade the money in place of the sixty bushels.

In a barter system, we might trade a chicken for a day's work. But now we have money being used for the chicken, and a value set upon the chicken and day's work. That value can change, too, depending upon need and desirability. A chicken can be eaten, or kept to make eggs. To a starving man, that's something better than gold.

Money has a value, too. If you and I agree that a loaf of bread costs one dollar, then the government prints ten times as much paper money as was in circulation when we agreed on one loaf=$1, the government has caused the money to be devalued. In math, equations, by definition, must always be equal.

By printing more money, the value of each dollar goes down, because nothing was done to change the value of the bread. Printing more money has changed the equation, but it did not change the equal nature of the equation. Therefore, the new value of the bread is: one loaf = $10.

(This concept is why most fiscal conservatives are against raising the minimum wage. All it does is falsely push up the cost of goods by increasing labor costs. The value of the work being done didn't change, only the cost.

If a guy is getting $5.00/hr to make brooms, and tomorrow his wage goes up to $7.00/hr, the value of his work didn't go up. He's still providing the same work as yesterday, only he's getting paid more to do it. That increases cost to the employer, who will raise prices to compensate for his increased cost.

And the employee isn't any better off, since the cost of other goods will also go up, too, for the same reasons. He went from making $5 to making $7 per hour. But bread went from $1 to $1.33 per loaf.)

Under our current system, the dollars have no commodity backing them, so this is the kind of thing that happens. When the US went off the gold standard (gold being the backing commodity), the US promised that it would not print additional money, or more than a certain percentage extra. Basically, we had given our word that we wouldn't print ourselves to prosperity, devalueing the dollar in the process.

And now we're doing exactly that.

Nebris said...

Is Dionne Warwick in your circle of friends?

And you're gonna vote for The Donald. lol

I see you decided to ignore both the refutation of the 'lower taxes' myth by a Bush Republican and the Third World wages issue and blather simplistic and sentimental homilies about 'loafs of bread'..and on Good Friday, too.

I suspect two thousand years ago you'd be shouting, "Give us Barrabas!"

Shrimp said...

"And you're gonna vote for The Donald. lol"

Really? Am I gonna win the lottery, too? What else can you tell me about myself? You psychics amaze me.

"I see you decided to ignore both the refutation of the 'lower taxes' myth by a Bush Republican and the Third World wages issue..."

Actually, no, I've taken a page from your playbook, and completely ignored it and then changed the subject (back to what we were talking about).

You still haven't answered any of my questions from my first two posts. Until you do, you have nothing to gripe about if I ignore your posts, or respond selectively. That would be hypocritical of you to do so.

Nebris said...

Wow, you went straight for the "Godwin," didn't you.....

"Godwin's Law is massively overused and abused and has been turned into a de facto ban on even talking about Hitler or the Nazis, which is patently absurd and rather Fascistic in its own right."


Nebris said...

As for the rest of your parroted talk points:

"I honestly wonder how many of you Whiners are actual Wealth Creators? Not McJob holders, but people who are actually creating some Product or Service that could make you money and literally 'create wealth'. Given all the Victim Noise I've heard here, I suspect not a fucking one of you. And that is what you're really all pissed off about; being unimaginative drones with delusions of grandeur who try to pull down everyone else.

You are exactly the kind of people that Ayn Rand despised the most, Wreckers and Levelers leeching off of the social whole. But you're either too stupid to understand that – most of you – or are in deep denial about being such. I'd say the latter are the ones who screech the loudest here, trying to drown out that little voice inside saying, “Faker. Faker.”

But keep ranting, my lil cuckoos. You are providing me with sadistic delight, which gives your sad little life some value.

“But Nebris, what are YOU doing?” some of you will sneer.

“Well, my little chickees, I'm building Brand Recognition. I actually DO Create. And the more that those I oppose hate me, the louder they'll scream when my Product rolls out. Free advertising, ya know. Now remember, that's N-E-B-R-I-S.”


And that's the story, baby. =)

Nebris said...

BTW if you were a real Conservative, you'd know there's no such thing as Hypocrisy in politics. There's only Spin and Marketing.

Shrimp said...

Hubris, your rants are fun to read. Have a Happy Easter.

Nebris said...

I have many faults, but being boring is not one of them. =)

And a Blessed Ostara to y'all.