Thursday, November 17, 2011

The Rich Get Richer

Megan writes:

Income inequality has been rising for so long that people have started to assume that it has just kept rising, even when the data show otherwise. We don't want to spend years focused on income inequality, only to learn that the financial crisis fixed it for us.

But I don’t think the charts she shows support her argument:

Top1percent

Top.1percent

These graphs don’t say that “the recession fixed it for us”.  These graphs tell me that income inequality took a cyclical dip as part of a 30+ year rise back to 1920s levels.

I’m inclined to think that, by itself, this trend is probably bad but not catastrophic.  But nothing ever happens by itself, and I’m much more vexed by the percentage of the national wealth going, not to people putting their capital at risk or creating value, but to financiers collecting rents by sitting astride key economic nodes.

1 comment:

Professor Hale said...

It's the wrong graph.

You should be tracking the wealth of individual people as they get rich, richer and poorer and then tie that to how they got that way. But that would take actual work and it would show that some poor people gov\t very rich. Some rich people got very poor. And a whole lot of other people made, lost or kept wealth.

For one thing, A lot of really rich people don't have "incomes" like the rest of us.

A great many of the people who got richer in the past 10 years have strong ties to government insiders.

That 4 Trillion per year we been spending went SOMEWHERE.