Income growth of 1% vs 99%

Moonlight Graham · November 8, 2011

Fareed Zakaria posted this on his GPS blog: Income growth

I've seen this in stat form, but it's more vivid seen in a graph. The 1% grow widely while the 99% almost stagnate after 30 years? Some disparity is expected but this is ridiculous. And this is after-tax income growth.

Also interesting is the big income spikes for the 1% before the 2000 and 2008 bubble popped. Showing here who is benefiting from - and who may, for obvious reasons, be significantly driving the causation of - these bubbles.

Ye who have drank the 1%'s Kool-Aid, who defend their individual liberties in a twisted conception of human rights, how shall ye apologize for them now?

eyeball · November 8, 2011

Ye who have drank the 1%'s Kool-Aid, who defend their individual liberties in a twisted conception of human rights, how shall ye apologize for them now?

With fawning stupidity I suspect.

dre · November 8, 2011

I wonder how this compares to to the income distribution during that aristocracies, the guilded age, and prior to the french and russian revolutions?

Michael Hardner · November 8, 2011

I guess you haven't been reading their arguments on here. They will respond with 'who cares ?' ... 'why are you upset about prosperity ?' ... 'these are the people working hard/creating wealth'

And these are good arguments. Economics is a game, and governments play at a certain level too. Economics is about trade-offs, though, and politicians can't deal with those.

How does a politician sell freer trade as something that benefits the overall economy when there are clear losers that are also constituents ?

Shady · November 8, 2011

I wonder how this compares to to the income distribution during that aristocracies, the guilded age, and prior to the french and russian revolutions?

There's no such thing as income distribution. Income is earned through various kinds of labour.

Michael Hardner · November 8, 2011

There's no such thing as income distribution. Income is earned through various kinds of labour.

...and speculation. I still haven't seen an explanation of where the 1% are getting these disproportionate gains, relative to the lowest 99% or whatever.

Shady · November 8, 2011

...and speculation. I still haven't seen an explanation of where the 1% are getting these disproportionate gains, relative to the lowest 99% or whatever.

Speculation is still a form of labour. There is work involved in it.

Michael Hardner · November 8, 2011

Speculation is still a form of labour. There is work involved in it.

So any form of making money is labour then. Including inheriting bonds when you're 1 years old and keeping them. Ok.

Shady · November 8, 2011

So any form of making money is labour then. Including inheriting bonds when you're 1 years old and keeping them. Ok.

No, inheriting isn't labour.

Michael Hardner · November 8, 2011

No, inheriting isn't labour.

But they're investing their money - by choosing to leave their money in place that's an investment choice.

Anyway, before we go down this path too far - my point is that whatever works is what we should do. There entire moral question of speculation vs labour vs who *deserves* their money is beside the point to me. Whatever works, and whatever flies politically should be the path we choose.

So, cutting taxes spurred investment and people voted for fiscal restraint in government and that's what we have had since 1980 or so as a driving force.

bush_cheney2004 · November 8, 2011

...and speculation. I still haven't seen an explanation of where the 1% are getting these disproportionate gains, relative to the lowest 99% or whatever.

The gains are a combination of income, and accrued wealth, which begets yet more income (e.g. capital gains). Many of the lower 99% have no idea what their net worth is, let alone what steps to take to increase net worth. The 1% can afford the best accountants and wealth management, are not solely dependent on wages for income, and own the means of production. The relationship between income and wealth is touched on here (USA):

http://economix.blogs.nytimes.com/2011/03/30/inequality-is-most-extreme-in-wealth-not-income/

Michael Hardner · November 8, 2011

The gains are a combination of income, and accrued wealth, which begets yet more income (e.g. capital gains).

That doesn't tell us anything. What's the breakdown ? Why are the 1% doing so much better ?

bush_cheney2004 · November 8, 2011

That doesn't tell us anything. What's the breakdown ? Why are the 1% doing so much better ?

Because they have the financial critical mass to do so. Take the so called 'Bush Tax Cuts' for instance....this was a larger windfall for the 1% over everybody else. There is no single magic bullet to the formula that maximizes income and wealth, but there are basic wealth management practices that maximize both, even in death.

This is also why there are huge battles over lowering the short and long term capital gains taxes in the US.

Edited November 8, 2011 by bush_cheney2004

eyeball · November 8, 2011

That doesn't tell us anything. What's the breakdown ? Why are the 1% doing so much better ?

Because of the relationship between wealth and power. The more you've got of one the more you have of the other.

Why this not to mention the OWS message remains such a mystery to some, is probably feigned.

bush_cheney2004 · November 8, 2011

Because of the relationship between wealth and power. The more you've got of one the more you have of the other.

Right....the opposite circumstance of many '99 Percenters' scratching for income and debt+interest payment is the freedom and resources to turn that upside down. Money literally begins to multiply like loaves and fishes!

Why this not to mention the OWS message remains such a mystery to some, is probably feigned.

Because they don't get it, and never will. They mistakenly went after the putzes on Wall Street, but that isn't where the real wealth and power resides. They are just tools for the game. I spent two years at a very large American financial services firm as a contractor, and the sophistication of their wealth management products always kept them two steps ahead of the tax man, even in death.

GostHacked · November 8, 2011

Speculation is still a form of labour. There is work involved in it.

I'll speculate that you are wrong. That took me no time at all, and with no work.

Shady · November 8, 2011

I'll speculate that you are wrong. That took me no time at all, and with no work.

Those that speculate for investment spend a lot of time researching market trends, and the businesses they're investing in. I'm not sure why that's so hard to understand. It's still work. :rolleyes:

bush_cheney2004 · November 8, 2011

Those that speculate for investment spend a lot of time researching market trends, and the businesses they're investing in. I'm not sure why that's so hard to understand. It's still work.

Sure is...just doing technical or fundamental analysis on a single equity takes time and effor = work. And sometimes you don't make money...you can just as easily lose money. So work hard at it pilgrims!

GostHacked · November 8, 2011

Those that speculate for investment spend a lot of time researching market trends, and the businesses they're investing in. I'm not sure why that's so hard to understand. It's still work.

Well it seems that most of the speculators got it wrong Shady. Or unless they were speculating that the collective economies of the world are heading for the toilet.

Shady · November 8, 2011

Well it seems that most of the speculators got it wrong Shady. Or unless they were speculating that the collective economies of the world are heading for the toilet.

I don't care whether a speculator gets it wrong or right. Unless that speculator is me.

GostHacked · November 8, 2011

I don't care whether a speculator gets it wrong or right. Unless that speculator is me.

If you really want speculation, we can look at your signature.

Shady · November 8, 2011

If you really want speculation, we can look at your signature.

True. But it doesn't cost me any research time or money.

blueblood · November 8, 2011

Because they have the financial critical mass to do so. Take the so called 'Bush Tax Cuts' for instance....this was a larger windfall for the 1% over everybody else. There is no single magic bullet to the formula that maximizes income and wealth, but there are basic wealth management practices that maximize both, even in death.

This is also why there are huge battles over lowering the short and long term capital gains taxes in the US.

Bingo. It works like that in agriculture as well. The guys who have a solid succession plan in place that doesn't involve having the kids buy the parents out are the guys that have the ability to keep expanding. Bill gates might have morally beter kids, but he's taking his wealth with him. Those kids are starting off at a disadvantage.

Even the kids who inherit all this wealth have to work at keeping it/making it grow. If they live too high on the hog and don't manage their money, they turn out like lots of NFL players- broke!