Friday, August 21, 2009
Economy Wording
Posted by Charles Mudede on Fri, Aug 21, 2009 at 8:31 AM
From NYT:
The rich have been getting richer for so long that the trend has come to seem almost permanent.They began to pull away from everyone else in the 1970s. By 2006, income was more concentrated at the top than it had been since the late 1920s. The recent news about resurgent Wall Street pay has seemed to suggest that not even the Great Recession could reverse the rise in income inequality.
But economists say — and data is beginning to show — that a significant change may in fact be under way. The rich, as a group, are no longer getting richer. Over the last two years, they have become poorer. And many may not return to their old levels of wealth and income anytime soon.
To begin with: We all know that unless neoliberalism is replaced by another economic system, the decline will end up not being a decline at all but a greater concentration of wealth. Later in the article:
For every investment banker whose pay has recovered to its prerecession levels, there are several who have lost their jobs — as well as many wealthy investors who have lost millions.If there are no real changes in the system, if the rules of a game established in the Thatcher/Reagan years (and refined in the Clinton ones) remain the same, we will see the crash and current crisis as nothing more than neoliberalism in a state of acceleration.
To end with: It sounds very wrong to say that the rich have become "poorer." The meaning of the word "poor" needs to be protected from the rich; its truth must be undiluted, its honesty unmolested. It would be better or more respectful to use this kind of wording: "Over the last two years, the rich have become a little less rich. As for the poor? They have become poorer."
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1
Everyone who cares about politics should read "The Conscience of a Liberal" by Paul Krugman. I also recommend his column in the nyt today.
2
Relative wealth is a cycle. Wealth expanded from the 1740s, peaking in the 1770s, declining until 1810 or so, staying low, then climbing from the 1820s to 1850s, then declining again. Rose in the 1870s, peaked in the 1890/1900s, declined slightly in the 1910s, but then rose to another peak in the 1920s. Then it declined.
Rose in the 70s, peaked in the 00s, declined in the 2010s.
Rose in the 70s, peaked in the 00s, declined in the 2010s.
4
I feel dirty, I actually think Charles made SENSE. I shall now proceed to the outdoors to scout for flying pigs, singing turtles and other such impossibilities of nature.
5
Charles:
Just finished a VERY interesting book called The Spirit Level: Why More Equal Societies Almost Always Do Better by Wilkinson and Pickett. Their thesis is that a concentration of wealth and inequality of income increases obesity, mental illness, violence, teen pregnancy et al through ALL levels of a society. Well worth the read - the authors are longstanding Brit experts in social determinants of health.
Just finished a VERY interesting book called The Spirit Level: Why More Equal Societies Almost Always Do Better by Wilkinson and Pickett. Their thesis is that a concentration of wealth and inequality of income increases obesity, mental illness, violence, teen pregnancy et al through ALL levels of a society. Well worth the read - the authors are longstanding Brit experts in social determinants of health.
6
It turns out that those nasty socialists were correct in their intuition that a more egalitarian society is a better society!
7
And 20 pounds takes the book home in the UK: published by Penguin Books. No, I don't own shares in Penguin .....
9
It would be nice if this was a "zero-sum game," and all that wealth that the rich have lost ended up in the hands of the poor. Sadly, that's not the case here. For the first time in ages, we've actually seen wealth destroyed, as only that utterly incompetent boob George Bush could have managed to accomplish.
10
Socialism is great, but I don't see it working well on a grand scale, in a country as large as the US. But there can be a happy balance between socialism and capitalism, I think. Taxing the richest at a higher rate, capping CEO pay or at least linking it to the median wage in their companies, tightening restrictions and monopolies (or near-monopolies), will lead to bigger government, yes (slightly scary to some liberals, downright terrifying to most republicans), but that will help keep the divide from growing and, hopefully, allow the gap to shrink.
12
@9 The money hasn't completely vanished; there are still a few scraps left of the million-dollar bombs and a few $9 bullets left over from the Iraq war, I think. That's gotta be good for something, yes?
13
Yes, Morgan @11, I agree, but then again, all of our money at this point is imaginary, so what's the difference?
14
Allyn:
The interesting thing is that the authors of that book say it doesn't matter how income equality is achieved: it can be done through redistribuitve taxes or through other methods. What matters that it is achieved. Societies as diverse as Finland and Japan are much better places to live in than America and Portugal: as long as you consider less violence, drug abuse, mental illness, obesity a good thing. And that pattern holds true through the 50 American states; the states with less income inequality are better places to live. It really is a fascinating book....O - so my enthusiam isn't curbed!
The interesting thing is that the authors of that book say it doesn't matter how income equality is achieved: it can be done through redistribuitve taxes or through other methods. What matters that it is achieved. Societies as diverse as Finland and Japan are much better places to live in than America and Portugal: as long as you consider less violence, drug abuse, mental illness, obesity a good thing. And that pattern holds true through the 50 American states; the states with less income inequality are better places to live. It really is a fascinating book....O - so my enthusiam isn't curbed!
16
That's rich, the rich crying poor. The high-end wealth was not imaginary, nor has it vanished. There appears to be a huge hidden economy in the selling of foreclosed houses. After foreclosure occurs, they are bought by the thousands without ever appearing on the public market for perhaps a third or less of their previous most recent sale value; then they are finally made available to you and me with a realty sign out front for two-thirds or more of their last public sale. So profit was maximized in the bubble with inflated prices and punitive rates, some of which were and are actually being paid; those who fell off the merry-go-round are being set up for another round. I predict that median home prices will near their previous maximums by the end of 2011.
The end-game of the financial, medical, and legal industries is to separate you from your last dime at the instant you draw your last breath.
The end-game of the financial, medical, and legal industries is to separate you from your last dime at the instant you draw your last breath.
17
We could just drag them out into the streets, grab them by the hair, and shoot them in the back of the head. Just put the poor little fuckers out of our misery.
Charles, while I may agree with you on this point, I refuse to be happy about it until I see your long form birth certificate.
Charles, while I may agree with you on this point, I refuse to be happy about it until I see your long form birth certificate.
18
One way of looking at it is that "the rich got a little poorer." Another way of looking at it is that the class of truly rich people shrank as its ranks were culled. The truly wealthy haven't gone anywhere. The rich are still getting richer, but they are jettisoning the wanna-bes. There may have been fewer rich people after the bubble burst in 1929, but the Carnegies and the Rockefellers had more money than ever. That's what's happening here.
Politicians who take their talking points from think tanks funded by the super-rich have been very successful at convincing people making $250,000 a year to take up common cause with those making $250,000,000 a year, and it has yielded huge dividends in the form of ever-falling taxes and an ever-growing slice of the pie for the one-percent-of-one-percenters. Now some of the faux-rich are beginning to get the message that they are not holders of capital, and are thus subject to the same boom-and-bust cycles as everyone else. When the chips are down the true holders of capital will blow your pension fund, move your job overseas and re-possess your house.
Politicians who take their talking points from think tanks funded by the super-rich have been very successful at convincing people making $250,000 a year to take up common cause with those making $250,000,000 a year, and it has yielded huge dividends in the form of ever-falling taxes and an ever-growing slice of the pie for the one-percent-of-one-percenters. Now some of the faux-rich are beginning to get the message that they are not holders of capital, and are thus subject to the same boom-and-bust cycles as everyone else. When the chips are down the true holders of capital will blow your pension fund, move your job overseas and re-possess your house.
20
I was sad to find out that Mr.McAfee's down to his last $4,000,000. Maybe we should all chip in and send him some ramen noodles.
21
Eventually, if we don't rebalance it, there will be an armed and bloody revolution.
There always is.
And, quite frankly, women and kids never fare well when that happens.
Better to do it peacefully, before we have to start hunting down CEOs on the streets.
There always is.
And, quite frankly, women and kids never fare well when that happens.
Better to do it peacefully, before we have to start hunting down CEOs on the streets.
22
I tried writing a polite rebuttal, but this post is wrong on so many levels and in so many ways that I just give up.
Enjoy your ignorance, Charles, I'm told it's bliss.
P.S. Ever considered moving to Cuba?
Enjoy your ignorance, Charles, I'm told it's bliss.
P.S. Ever considered moving to Cuba?
23
@11, Its not all imaginary, but yes, our entire economy is still inflated. And yes, this is definitely the largest consolidation of wealth since the Great Depression. Those with capital on hand are making a killing.
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