Friday, April 17, 2009

Intriguing


This is not what I expected. I had always assumed that the top earners were pretty well insulated from recessions, but they are affected much more than others. Not that they are hurting by any measure!

I would guess that this represents how much of their wealth is tied into the stock market.

This is more data pulled from the congressional budget office. Fun stuff!

EDIT - Notice also the explosive growth in the late 90's. This was happening at the exact same time as our brief flirtation with actually paying the nation debt. I have no idea what that means.

9 comments:

(O)CT(O)PUS April 17, 2009 at 7:53 PM  

OMR: Not that they are hurting by any measure!..............................

An classic understatement in excess of 400%. I hate to be an "I told you so." But I did.

The middle class is the only thing keeping the U.S. from turning into a banana republic.

(O)CT(O)PUS April 17, 2009 at 7:58 PM  

BTW, apropos of this post, you might find this interesting.

OpenMindedRepublican April 17, 2009 at 8:33 PM  

(I edited this post to add something I onticed about the timing of all this)

I read the post on reducing inequality. Some of it mirrors my own thoughts, especially the creating a new tax bracket at the top. That is pretty close to what I suggested, although I was thinking a whole separate tax.

Not so sure about jacking up the minimum wage - the median number of wage earners in the bottom quintile is zero. Raising minimum wage isn't going to help much, and there is at least some evidence to support the notion that it increases unemployment.

The earned income tax credit needs to be spread out across the year. Giving a big lump of cash to poor people once a year is counterproductive. All of the people I know who get it spend it on flat screen TV's and rims for their cars. Let's face it, dealing with 'large' sums of money is not a skill they have much practice applying. Far better to spread it out over the year.

TAO April 18, 2009 at 3:23 AM  

OMR,

I believe your graph pretty much throws out your assertion that all income groups experienced wage grow over the last 20 years...

The wonders of supply side economics...

TAO April 18, 2009 at 4:23 AM  

"EDIT - Notice also the explosive growth in the late 90's. This was happening at the exact same time as our brief flirtation with actually paying the nation debt. I have no idea what that means."

Its very simple, if government is NOT in the credit markets competing with companies in an attempt to borrow money then companies can borrow money cheaper and grow.

If government appears to be attempting to get its financial house in order then investors see a country worth investing in because they see a no nonsense country that is focussed on its future...

Then we got Bush: a dumb ass who inherited a country headed in the right direction and he.....

Changed it.

(O)CT(O)PUS April 18, 2009 at 8:05 AM  

Raising minimum wage isn't going to help much, and there is at least some evidence to support the notion that it increases unemployment.......

Actually there is much more evidence that increasing the minimum wage has a stimulus/accelerator effect ... quite the opposite of increasing unemployment. This is the old Pottersville argument put forth by small business for keeping wages down ... and it is a false argument.

TRUTH 101 April 18, 2009 at 9:10 AM  

In your own subtle way, you do a good job pissing off Octo OMR. Your post appears to me to be a grudging admittance of Clinton's successful presidency. Congratulations for seeing the light Brother.

TAO April 18, 2009 at 9:25 AM  

Actually, OCTO, I am not sure that minimum wage has the broader effect on wages that you believe. I think it does boost the wages of those that hover around the minimum wage but it has no bearing whatsoever on middle class wages.

That is the fundamental problem of our economy. We obviously do well at rewarding those who have wealth, as OMR chart points out, and we can moderately make a difference in the wages earned by the lower classes through minimum wage and Earned Income Credits. But, the folks between these two extremes are getting squeezed.

I would have thought that with our continuing productivity increases that that would have translated into increased wages and opportunities for middle class folks but that is not true either.

OpenMindedRepublican April 18, 2009 at 11:55 AM  

Truth - I am not interested in angering anyone. I do think that a lot of the talking points on both sides of the aisle are not supported by the cold hard numbers. I follow them where they lead....

Oh, and there is nothing grudging about my acceptance of Clinton. I thought he wasn't half bad even at the time. Looking at the numbers now he did great. And I cannot begin to express my disgust at the whole game of 'pin anything on him' that the Republicans played on him. It was a blatant attempt to distract from the real scandals that rocked Bush. That was obvious even at a time when I didn't much care about politics.

My experiences back when I made less than twice the minimum wage was that raising it is brutal on the people just above it. The state I live in has one of the highest in the nation; Every time I would get more than a couple dollars up on it, I would loose ground when it went up. And prices and housing would go right up with it.

Perhaps not coincidentally, my state also has had one of the highest unemployment rates in the nation for as long as I can remember. I cannot say that this is a result of the high minimum wage, but it argues heavily against raising the wage lowering unemployment.

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