"Here is another off topic link, though I don't think it will lead to any insight or mind changing, as views on reducing inequality through govt policy seem quite entrenched."MJ America is the Stingiest
My first thought is why don't these people do some kind of comparing "relative wealth" when they create these tables/graphs? If USA wealth distribution is bigger, but the distribution is typically higher than other countries, why should we care? (ie meaning if our "poor" are similar or better off than their poor, but our rich are richer) Remember that we have some incredibly nice homes, cars, vacation homes, etc compared to a lot of these other general populations...
The countries they picked are fairly interesting to me. They seem like they are countries that are not real diverse or actively / aggressively allowing people to immigrate. However I could be incorrect.
So I dug a little further... It seems that MJ is abusing data to aggressively mislead... New Yorker Inequality See figure 3, and note that the NY says that US does less than most. And the data clearly shows that Taiwan and South Korea do significantly less than the USA. Now do we want to be growing aggressively like Taiwan / South Korea, or growing slowly like Ireland, Poland, Sweden, etc...
Also, please note that figure 2 supports my theory. The change occurred about the same time people stopped buying American and started buying from low cost countries... You know, the ones like Taiwan, Japan and South Korea
Thoughts and Happy Thanksgiving !!!
42 comments:
The argument I would raise is that distributing wealth to a relative few is bad for the economy as a whole, and by the way, politically destabilizing. If you notice, as wealth becomes more concentrated on fewer people, the US is becoming a less stable country politically. Just a few years ago, for example, no one would have even considered dishonoring America's debt.
--Hiram
you seem to be having slight difficulties with reading comprehension again, as Drum's post is not misleading. Maybe Taiwan and Korea are not considered rich countries, but the main reason Drum doesn't include them is their inequality is much less to begin with.
Also, I doubt our poor are better off than the poor in many of the countries on the list, though we will soon be making significant progress in access to health care.
I wonder if employers in Sweden hold a charity food drive for their employees
Maybe rather than shopping on Friday you'd like to attend a social justice rally:
we make Black Friday happen
Drum writes this... "Mazie says, is one that compares raw income inequality in various rich countries (as calculated by GINI scores) to income inequality after taxes and government transfers. In other words, it helps us see which countries do the most to fight the relentless rise in income inequality over the past three decades."
Then arbitrarily removes countries from the referenced data set... Allowing him to use the word "stingiest" in the piece's title... And you don't think that is misleading??? C'mon now, you don't really think this happened by accident. He was writing this for MJ readers, he was stretching...
As for including only "wealthy" countries, you have got to be kidding since he left Greece in his graph.
Maybe this quote will make a good future post...
"But for those Americans who still believe that free enterprise means that working hard at a job should be compensated with a livable wage, I hope you will let your feelings be known."
So according to this logic, the employer should pay a "liveable" wage, even when there are millions of employees who are thankful for the job even if they are paid only a "competitive" market wage. And even though the American consumers, including Liberals, will usually shop at the low cost businesses.
I will not be joining you since I never shop on Black Friday, however I applaud your effort at putting your money where your mouth is. (ie buying American Made at higher wage stores) If most consumers did this, Walmart would be paying more...
"distributing wealth to a relative few"
I always love your paradigm that "we" are somehow "distributing" wealth to the few.
Drum says right in the title of his graph "all countries with pretax gini above o.5" so it is not arbitrary.
As for your other comments I have no response because I don't understand them or where the quotes came from.
It seems Pope Francis has some things to say about the world economic system that "we" have created:
The Pope Just Published One Of The Most Powerful Critiques Of Modern Capitalism That You Will Ever Read
I could not read it all in one sitting, but I do like the new pope's ideas/focus much better than his predecessor's.
Quote was from your "charity food drive" article.
It is good that your are getting religious and referencing the Pope... Maybe you will be pro-life before you know it.
I have been quite religious for some time, attending church twice a week. Part of my black Friday tradition is attending a program at my church as an alternative to excessive consumerism.
It seems to me raising the minimum wage is the most realistic option to benefit low wage workers.
Is this your church?
I was thinking that "Unitarian and Universalist" would be hard pressed to be called "relgious", since my atheist friend used to attend there. However per definition 3 it does sound correct since apparently religions do not need to include a deity, though I think most do.
Religion defined
With Dayton and the DFL in control, you may get your wish. That may raise our unemployment rate as automation will then be more affordable (ie relative basis), only time will tell.
Without having to do all the reading and research, perhaps one of the enlightened here can tell me. Is it not true that what is being measured here is GOVERNMENT transfer of wealth? Sure, on that basis, there are governments that are more socialist-- spreading the (limited) wealth around-- and some that are more oligarchic/dictatorial, spreading the wealth to a very few. By all accounts, if you add in PRIVATE charity, America is the most generous by far.
The second argument I would make is that income inequality is what drives economic growth, while government redistribution actually depresses it. People want to get rich, so they find ways to make something people want. At first, only rich people can afford it, but as more people get rich making the thing, MORE people can afford it, and round and round, upward we all go. Americans didn't become the wealthiest country in the world by stealing from each other.
I do go to a UU church and there are a lot of atheists who attend, but they are agnostic rather than evangelical atheists who do not object to prayers to a mysterious "God of many names and beyond all naming". Our minister describes our membership as including Jews, Buddhists, Muslims, Christians, humanists and more. Mine is the most traditional of UU congregations in the Twin Cities and the services are quite similar to a typical protestant service.
About the impact of inequality on the economy, liberals seem to believe that it has a negative affect, as nearly all additional money acquired by low income people would be spent, thereby increasing economic growth. They don't make this claim as fact because it has not been adequately researched, but there is a new organization that will be researching this and related questions; Washington Center for Equitable Growth
Laurie,
If "Paul" spends every dollar we give them from "Peter" at Walmart or some other foreign goods provider, then we are just taking investment capital out of the economy and increasing the GDP of foreign countries. Granted there would be some small benefit to the American retail economy.
At least when the Government does build infrastructure, fund the military, etc, The money often goes to domestic manufactures and service orgs.
I have heard that liberal argument often, that money distributed to the "poor" all gets spent and that drives the economy. It simply proves that liberals know nothing about how economies actually work. Start with the axiom that the only real wealth is produced by people working. Money that is redistributed gets spent on current needs, at best (redistributed by government, much is wasted), and thus produces a disincentive to work on both ends of the transfer. Therefore, while this money circulates in the economy, the economy does not grow, and may actually shrink because of the disincentives. Left in the hands of "the rich" it will be invested, thereby increasing the total wealth of the (national) economy as additional productivity is created to make more wealth from the given amount of work. When the wealthy spends, it drives the need for new products and services, which eventually become commonplace, thus raising the standard of living-- wealth-- of the society from the demand side. America may be poor at redistributing wealth, but it is the best ever at creating it.
Keeping the money moving has benefits also. Though I am a big fan of saving and investing, a bunch of wealthy people sitting on their investments isn't all that great either.
I believe there has to be a blend.
"keeping the money moving" is exactly what investment is. The money doesn't sit in a bank, it gets spent by the people who borrow it, usually on new businesses or new equipment or new workers, all of which increase the total wealth of the society. An agricultural economy without seed corn is doomed to failure. The same with an industrial economy.
Stock ownership? Similar or different?
Rich people (or companies) don't "create jobs" or "create wealth". Jobs and wealth are created by a combination of products and services that meet customer's needs and the ability of those customers to pay for them.
If workers took home the same percentage of economic output that they had 30 years ago, the average household would have about $10,000 more to spend than they do today.
Our economy would be far better off with richer households across the economic spectrum than the increasingly concentrated wealth we have today.
I also find it interesting that Ireland is now on the "bad" list, when it wasn't that long ago that Ireland was the model that many conservatives were suggesting that the U.S. emulate.
Of course investors create jobs, who do you think is funding the research and development that is needed before that product and consumer can meet?
Who do you think is paying for that manufacturing plant to be built so that the product can be produced at a price that the customer will find acceptable?
Who do you think is paying so an inventory of the product can be produced before the consumer has ever paid for it?
Who do you think is absorbing the losses when the product is not as valuable in the market as the company thought it was, or to when the product becomes suddenly obsolete?
True wealth creation only occurs when useful "Intellectual Property" is created, or when significant Value Add has occured. (ie Google system, Farming, Manufacturing, Education, Mining, etc)
No wealth creation occurs during most transactions, since items of approximately the same value are being freely exchanged. (ie product/service for money)
For more on wealth...
G2A Korea and USA Wealth
"If workers took home the same percentage of economic output that they had 30 years ago, the average household would have about $10,000 more to spend than they do today." -- Sean
Sean, you're going to have to explain that one to me. The total economic output of the country consists of all goods and services sold. People produce all of the goods and services through labor (assisted by capital), and consume all the goods and services individually, or collectively through corporations. Generally speaking, government "produces" nothing. So where is that "missing" $10,000 going? Government, perhaps?
Simply put, after-tax corporate profits are at (or near) all-time highs (depending on how you measure it), and wages are at or near all-time lows. Corporate cash reserves similarly are at or near all-time highs. Huge piles of money are sitting on the sidelines of the economy right now.
The economy as a whole would be better off if that money on the sidelines went back to workers as increased compensation.
Sean,
Please provide a source regarding the "money on the sidelines". I find it hard to believe that normal corporations are going to hold too much in cash, since the interest rate is so low and their stockholders expect much higher returns than ~1%. Or they expect to see dividends paid out.
And the cash on the sidelines is usually used to fund all of our home, auto, business, etc loans. I don't see anyone putting it in a safe in their back room.
In an MBA course, they told me that General Mills typically runs with little cash and lots of loans. (ie highly leveraged) Because they can use other peoples money cheaper than using their own. They can do this because their revenues tream is rock solid. (ie cheerios sell in booms and busts)
Apple, Boeing and other high tech high risk companies need to hold cash and minimize debt in case things turn rocky.
One of many such sources:
http://www.eoionline.org/blog/why-are-corporations-hoarding-so-much-cash/
EOI Corp Cash
No time to read it now. However I do know many of them fear a double dip recession. (ie risk high = cash high)
Do you really believe that these companies have Scrooge McDuck safes they are holding this cash in?
If these American companies make profits in other countries, do you really believe they should pay taxes on this money when they bring it back to the USA? If so, what is your rationale?
WSJ Why Holding Cash?
Please note that they mention short term investments, not Scrooge McDuck safes. So the "cash really isn't cash... It is actually being used, loaned out, etc.
Corporations are "holding cash" for exactly the same reason that recessions drive decreased spending and increased saving-- uncertainty. And Obama has been the King of Uncertainty. Unless, of course, you count the certainty that everything he says and everything he does will be wrong, in some fashion. Or that if he says the right thing it will certainly be a lie.
Obama is the king of uncertainty? Which party has been the ones looking to do everything -- debt ceiling extensions, etc. -- on a short-term basis?
Which party has been denying that $1 Trillion deficits are a problem, and saying they not only can but must continue indefinitely? OK, leaving the budget in its current irrational/delusional state is "certainty" of a sort, but it also creates uncertainty because we all know that this cannot go on forever. Reality WILL intrude, though it is very uncertain as to when and how awful it will be.
You are aware that the budget deficit is well under $1 trillion now, right?
FactCheck Deficit Falling
It may no longer be a TRILLION, but ~$700 BILLION is nothing to sneeze at...
And to help refresh your memories that the GOP and DFL both helped to generate that spending spike.
Fact Check Spending Inferno
Let us examine this spending in light of Obama's promise. That, as you recall, was that the deficit would be cut in half by the end of his first term. It wasn't, it was FOUR TIMES as high as the last Bush budget (not actual, but budget). And the salient fact here is that he has done absolutely nothing to restrain spending, and he gets all the credit for the government's budgetary outcomes. Not fair, but that's the way it is.
As do all the politicians and businessmen who are in charge when the economy is going up. Often it is better to be lucky than smart.
True, unless you were elected to be smart and solve problems, rather than create them. Or to get back on topic, should America be good at transferring wealth, as Obama obviously believes, or should it be about CREATING wealth, of which he has no clue?
Obama has done "nothing" to contain spending? The delusions run thick here.
Delusions? Perhaps, subject to evidence of such, please. The last I heard, Obama refused to accept any cuts whatsoever in spending, refused to negotiate at all over the debt ceiling, and has consistently called for more "investment" aka spending.
If Obama refused any cuts in spending, how did the sequester become law? If Obama didn't cut spending, then why did I hear Republicans telling me he cut hundreds of billions out of Medicare? If Obama refused to negotiate over the debt ceiling, why didn't we default on our debts?
Your talking points are disconnected from reality. Sure, perhaps you would have preferred that Obama support more spending cuts. But to say he hasn't cut any spending is just factually incorrect.
I agree with Sean that Obama has done things to cut spending.
I agree with Jerry that he wouldn't have if the GOP wasn't forcing him to do so.
I am not sure I would call the "medicare cuts" cuts. I don't think trying to implement price controls likely works out too well usually. Reducing payment either leads to worse performance and/or worse quality. Or at least that's what the Teacher's Union folks keep saying...
"If Obama refused any cuts in spending, how did the sequester become law? If Obama didn't cut spending, then why did I hear Republicans telling me he cut hundreds of billions out of Medicare? If Obama refused to negotiate over the debt ceiling, why didn't we default on our debts?"
The sequester became law because Obama proposed it to force higher spending on the GOP and they called his bluff. Once it passed the House, he railed against it, and continued to rail against it even after he signed it, doing everything he could to undo it, which he has now largely done. And of course spending grew substantially even WITH the sequester, since it was only 2% of the budget.
Obama cut Medicare, and then passed on this magical, mystical money to Obamacare funding. THEN he agreed with the Democrats that we must have the "doc fix" that passes every year, so that the cuts never really materialize. The one area where there were real cuts in Medicare (still consumed by Obamacare), was forcing a lot of people OFF of the Medicare Advantage plans they liked and wanted to keep.
Obama refused to negotiate over the debt ceiling not because he had proposed NOT raising it, but because he wants no constraints on raising it as high and far as his utopian dreams require. And in fact he forced that outcome after the shutdown, that he can raise it without limit until something like March 30th.
Post a Comment