Didn't Oregon State just beat USC?

My own suggestion would be changes in cultural mores. Soieties with low levels of religious and ethnic diversity are highly egalitarian; societies with high levels of diversity are much more inegalitarian. For example, New York City has always been both very diverse and very inegalitarian, whereas most Midwestern towns have been homogenous and egalitarian. But American society as a whole has become much more diverse and so less egalitarian.

Anyway, I'm hoping that anyone who disagrees with this analysis will respond without using the word "repugs," which doesn't really advance the analysis.

Part of it is little stuff that you don't hear much about, such as: banks pay higher interest percentage to larger accounts. It's all in the same pot, so shouldn't they give us all the same interest rate? I noticed this trend increasing over the years. Then of course there's the reduction in rates for capital gains and interest ("flat tax" was supposed to mean the *same rate* on all income, wasn't it?....), the reduction of minimum wage in real terms (constant dollars as all price values must be rated), change in labor laws, etc. Biggest overall reason: rise of Republican power. The majority would never vote for 'pugs if they understood their own true economic interests, so the 'pugs *must* fake and misdirect to get elected.

I did it for you, sean (hannity?), even if not a response to your point, and at least I used an abbreviation. BTW, it doesn't advance the analysis to bother about people's put-downs if they really did analyze... BTW2 I prefer "Repiglicans."

It's hard not to analyze the disparity without mentioning the repugs. If you have a lot of money, you can improve your chances of fattening your bankroll even more if you buy yourself a political party. The super rich, did and the repugs were easier to buy. Check where that top one percent's money goes in donations.

But, but, the Boskin Comission!
Hedonic adjustment!

Poor people have DVD players and plasma screens!

Greater returns to education? Do you really think that the top 1% are better educated on average than the next 9%?

Greater rewards for technical skills? Do you really think the top 1% have greater technical skills than the next 9%?

Globalization?

More stable families?

Race and gender?

A failure to take account of the growing value of health benefits?

Do any of these things plausibly seem like big differences between the top 1% and the next 9%? Pretty clearly they aren't.

Do you have any actual data backing that up, or is Saturday "argue by assertion" day at Political Animal? Maybe the top 1% is much better educated; I don't know. Do you?

Ignore last post, screwed up the tag:

Greater returns to education? Do you really think that the top 1% are better educated on average than the next 9%?

Greater rewards for technical skills? Do you really think the top 1% have greater technical skills than the next 9%?

Globalization?

More stable families?

Race and gender?

A failure to take account of the growing value of health benefits?

Do any of these things plausibly seem like big differences between the top 1% and the next 9%? Pretty clearly they aren't.

Do you have any actual data backing that up, or is Saturday "argue by assertion" day at Political Animal? Maybe the top 1% is much better educated; I don't know. Do you?

If you have a lot of money, you can improve your chances of fattening your bankroll even more if you buy yourself a political party. The super rich, did and the repugs were easier to buy.

I'm sure the Libertarians would be easier to buy. But the Libertarians haven't sucessfully conned all the rednecks that they're the party of God, so the Libertarians don't ever get elected. If you're gonna buy a party, you've gotta buy one that can get elected.

And while you're making comparisons, be sure to compare the top 1% from today with the top 1% from 25 years ago.

Is the top 1% of today better educated? Smarter? Wiser in its decision making? Isn't it pretty likely that the top 1% is the segment of the population that has LEAST changed in its overall skills? Surely it was, 25 years ago, pretty much at the peak of education, experience, and ability, having already, at the time, all possible advantages going its way.

And that's the REAL absurdity here: it's plausible that the top 20-30% of the population today is indeed better educated, and more highly skilled than it was 25 years ago; these are exactly the class of people who would have enhanced their background and knowledge, having had greater opportunities and pressures to do so. And yet they have lost, rather than gained, a vast stretch of ground to the top 1%.

What possible sense can that make? Why shouldn't we conclude that modern American capitalism is broken?

Just to make my point a bit sharper: The top 20-30% of the population today has, in terms of knowledge, skill and education, only made up ground with the top 1%. Yet they are are only losing ground economically.

That is why modern American capitalism would seem to be broken.

Some people are really good at making money. Some people are really interested in making money. Because our economy is both free and complex, those who want to make a lot of money and who are good at making a lot of money can become much richer than the rest of us.

Why shouldn't we conclude that modern American capitalism is broken?

Because, uh... GDP! Lookie! Big numbers!

I generally fee very lost when thinking about income inequality, but I think Paul Krugman made a very important point: among labor economists, skill biased technical change, which is what Kevin is talking about when he refers to returns to education, is used to explain anything that we don't understand.

Now, economists do that for lots of things -- when there are things about GDP growth that we can't explain, we call them total factor productivity, which just means general technological progress. Solow referred to TFP as just being "the measure of our ignorance." Similarly, the stories about SBTC, saying, "well, highly paid people must just have benefitted from a specific [and yet usually unspecified] type of technology," are mainly just measures of our ignorance.

I don't know, Kevin. Its certainly possible that the top 1% are significantly better on some dimension than the next 9%. Think about professional athletes. The top 1% of basketball players are far better than the next 9%. The real question is do the top 1% DESERVE all that money, even if they are better at what they do -- and do they deserve it no matter what the cost to the rest of the distribution?

Some people are really good at making money. Some people are really interested in making money. Because our economy is both free and complex, those who want to make a lot of money and who are good at making a lot of money can become much richer than the rest of us.

Some people are really well-connected. Some people are really interested in making money. Because our economy is both corrupt and large, those who want to make a lot of money and who are good at bribery can become much richer than the rest of us.

"Some people are really good at making money"

What does this really mean? Does this have any meaning other than the painfully obvious?

I'll grant you that the American economy is complex, but exactly how free is it? If it were free, the barriers to "being good at making money" wouldn't be so prominent. The notion that people are wealthy because of some exceptional skill or desire would make more sense if there were more extremely wealthy people falling down the economic ladder for lack of will or talent.

There are structures in the US economy, from tax law to the political system to networking, that make it easier for wealthy people to retain and gain wealth than for poorer people to do the same. To pretend that there's some sort of formula where talent + desire = wealth is to live in a tidy world, devoid of the complexity you claim.

So why is the top 1% outpacing even the well-to-do who inhabit the next 9%?

In an increasingly Godless world, it takes more and more money to indicate whom He has chosen as the elect from before all time, and whom He has chosen as the reprobate damned.

I believe that David Cay Johnson's "Perfectly Legal" is exhibit A here. For those of you interested in how politics and government policy interact, it's a must read. The premise of the book is there are two tax systems - one for the political donor class and one for the rest of us. Johnson lays this out in devastating detail; it caused me to seriously doubt our political economy.

The top 1% can defer taxes until they aren't paid and shelter income in ways that none of us W-2 and 1099 rubes can. The result is that they are able to accumulate wealth in ways that would have been unimaginable in the days prior to Ronald Reagan.

Furthermore, the CEO's of this nation are in a club that allows their pals to set their compensation and benefits while corporate governance is a joke. A recent economic paper demonstrated that the market for CEO's isn't actually a free market.

My word for it is neo-feudalism.

Lord Acton has the answer to this puzzle.

Although I suspect this sort of idea won't fly here, it is interesting to note that over the last 30 years or so, American capitalism has looked an awful lot like Marx's analysis of how capitalism works in Capital vol. 1. You could argue that Marx was right all along; we've missed this (and Marx has of course been thoroughly discredited by the cold war and the failure of the USSR, despite the fact that he had little to do with them) because the various 20th century reforms of capitalism limited its destructive power and masked its fundamental dynamics. The reforms of the Progressive Era reforms (anti-trust, income tax), the New Deal (Social Security, labor-owner truce), the Great Society (healthcare, housing) all stabalized capitalism. But since the 1970s, many of these reforms have been weakened if not destroyed, giving capital new wings and greatly expanded power. The results are all around us. The most noticeable result is the staggering growth of inequality in the US and globally (China is another powerful example).

I'm by no means suggesting that we're heading for a revolution. Neither did Marx. Das Kapital does not end with revolution, but with poverty and despair amidst ruling class splendor. That seems a more likely outcome.

TheFool, if you think the top 1 percent is made up of basketball players, you're aptly named.

Money is power; power, money.

My idea is fairly simple. Most of us know someone who carrys a wad with him at all times, and the same person is the one we know that is always finding the deals. When people know you have the money, they are attracted much like a magnet. Those with the cash usually get 1st crack at all the best deals, it doesn't matter if it's a DVD player off the back of a truck, or a IPO.

Sean,

I'll stop using the term "repugs" when the Republican party stops acting like a repugnant gang of thugs. (See: Guantanamo, Abu Gihrab, Florida 2000, and other handy references.)

If we just continue that "tenth of a percent, hundredth of a percent" thing, it suggests that maybe there's just one really, really rich guy skewing the averages. In other words, it's all Bill Gates' fault.

George W. Bush and Limp Dick Cheney were sitting in a bar. A guy walked in and asked the bartender, "Isn't that Bush and Cheney?"

The barman said, "Yep, that's them."

So the guy walked over and said, "Hello. What are you guys doing?"

Bush said, "We're planning World War III."

The guy asked, "Really? What's going to happen?"

Bush said, "Well, we're going to kill 10 million Iranians and one bicycle repairman."

The guy exclaimed, "Why are you gonna kill a bicycle repairman?!"

Bush turned to Cheney and said, "See, I told you no one would worry about the 10 million Iranians!"

the Libertarians haven't sucessfully conned all the rednecks that they're the party of God

I guess I stumbled upon the Democrat Outreach meeting by mistake.

Anywhoo, the idea that somehow those in the top tiers are somehow automatically conservative or Republican is certainly interesting, but wrong. Many of those who hold the levers of power and who own the means of production (comrade) are on the "liberal" side. That's why the "priests" of the elite (media, academia, etc.) are "liberal"; if those who own and fund such sources didn't think the same way we'd see more WashTimes. You might want to go to a library and pick up a copy of one of FerdinandLundberg's books.

On a side note, good ol' Ned Lamont is supposedly an heir to the J.P. Morgan fortune; perhaps that explains some of his policies.

As for the Democrats, almost all of their leaders support an economy based on low wage labor. Not satisfied with our current proletariat, many of those leaders strongly support importing a new group of low-wage workers. That has the effect of both growing the lower class and enriching the upper classes. The idea that the Democrats are somehow the party of the little guy is ludicrous.

-- Submit questions politicians don't want to hear, and submit their answers.

It's ideological. Power justifies itself.

People who have power and status are entitled to more wealth and power.

RE this comment:
*** Some people are really good at making money. Some people are really interested in making money. Because our economy is both free and complex, those who want to make a lot of money and who are good at making a lot of money can become much richer than the rest of us.
***

If Kevin Phillips' books are any indication (and I believe that they are) ... that top 1% didn't *make* money (in the vernacular way most Americans use the term) ... they *inherited* it.

This is why the Bushites support a return to the policies of the 1890s. It seemed generally good for the wealthy, a class that they desperately want to either join or are already in.

I'm curious though, hasn't the generally trend of the US population up til now been been to become wealthier and wealthier.

I submit that the wealth that would generally 'trickle down' to people in the US is now going to the wealthy of countries other than the US. And the wealthy here are giving it to them rather than giving it to the average Joe. Why that may be is rather complicated...but it does feel as though that is happening.

AH: Maybe the top 1% is much better educated

GWB: Is our children educated?

Finally, AH's true identity has been revealed.

Let us look at this a bit more rationally. It has been reported that the CEOs make 360 times more than the average worker. Even the lowest paid CEO makes something like 5 million dollars. I am a PhD in engineering from Berkeley making just six figures. How is that goddamn CEO better educated than me? That CEO makes 50 times more than me. If you assume that your immediate boss makes 20-30% more than you, the ratio is 1.3 and at that ratio, the CEO is 15 levels of management higher than me. No way I am at that "bottom" level. Basically, it all boils down to greed and the maxim "screw every one".
If you look at the evolution of labor, communism, workers rising up, this was exactly what caused it. I wouldn't be the least bit surprised if there is a repeat of this.

"Better educated" is a euphamism for knowing the right people.

alex asked: What does this ["Some people are really good at making money"] really mean? Does this have any meaning other than the painfully obvious?

I worked, indirectly, for one such person, Henry Singleton. Singleton was a brilliant research physicist, who decided to go into business. He created a conglomerate called Teledyne. He measured his performance in terms of money. At one point, he was close to getting his personal net worth above a billion dollars -- "Working for another zero" is how one wag put it.

Anyhow, he applied his brilliance to seeing that the companies Teledyne owned were successful and that the investments made were successful.

BTW he was not poor when he started the business, but it was his brains and drive that made him a billionaire.

It's important to keep in mind here that whatever we posit as "the cause of the change in income distribution", it has to be something that's changed recognizably in the past thirty years or so. Otherwise each of us is just grinding his own favorite axe.

Obviously many rich people are smart and hardworking; obviously many are corrupt. Do we have evidence that these things have changed in the past thirty years? I don't see human nature changing that quickly.

I would suggest globalization, which depresses wages for those in low skilled jobs (at least in the US) while enhancing opportunities for those in a position to sell their product to many new customers (media and software producers, athletes, and fast food franchisers come to mind).

I'm sure that there are several good explanations. But they should be structural, not moral.

My small garbage service company, several years ago, raised their prices compared to a competitor from out of town. When I called to ask why, the owner's wife plaintively said that they had to raise prices to stay in business because the big company was given preferential treatment at the garbage dump. It turns out there was a new 'policy' at the 'public' land-fill site that lowered prices per truck load for 'volume' dumpers. Well, the reasonableness of that new policy escapes me as each truck-load uses the same amount of land-fill space.
I believe that this was a strategy of a big company lining the pockets of politicians [who oversee the public land-fill] to be able to stifle and kill off a small company, adding to the monopoly power of the big company. [ I have happily paid the extra to support the little local company.]

This is a small town example of what must go on big-time on the national scene, with CEOs orchestrating the lobbying and political machinery to stifle entreprenuerial and competitive spirit and negate the good of all who are not on the tiny top of the pyramid.

It would be easier for a camel to pass through the eye of a needle than for a rich man to enter the kingdom of heaven.

Anyway, that's what I say.

I am not so much concerened about what the top 1% is getting in personal income as what the rest of us are not getting. The very rich recieve income in a varitiey of ways so it is very hard to keep track. If you look instead at the income share of GDP that the bottom 99, 95 or 90 percent recieve, there is a steady decline after the mid 70's with the only upturn in a few years in the late 90's. see graph at
visualizingeconomics.com
The studies by economist on the effects of immigration, trade, or education on wages are only addressing how the shrinking share is being divided among workers, not why their share is shrinking. I suspect that in controling inflation with a budget deficit the fed has kept the unemployment rates high enough to suppress wage increases that are normal at business cycle peaks.

Two-thirds of Forbes' 400 top richest Americans did not inherit their wealth.

This entire discussion is based on the assumption that there is a "wealth bucket" somewhere, probably in Washington, and some people are fishing too much out of it. Not how it works. That Bill Gates gets a lot more money doesn't take it away from the guy who sweeps the sidewalks, and if Bill Gates makes less money, the guy sweeping the sidewalk doesn't get a percentage of the leftovers.

BTW, the richest in this country aren't all Republicans by any stretch of the imagination.

Donations

Celebrities, rich and otherwise, are pretty much solid Democratic.

The term "global economy" implies a single, planet-wide market for everything, including labor. We're far from arriving at such a destination, of course, but we're seeing its harbingers with increasing regularity (e.g., U.S. programmers priced out of a job by people with equal skills in far away India).

Theoretically, at some point in the future, price differentials world wide should become tiny, and eventually vanish. Hence, a Big Mac will cost the same in Peru and Norway; an hour of acupuncture the same in Hong Kong or Nigeria; fifteen minutes of tech support the same in Long Island or Mongolia. The price of labor (wages) is naturally not exempt from this trend.

If we are indeed moving toward such a world, then ordinary folks living in rich countries can expect to see income/wage differences flattening between themselves and those in the developing world. Likewise the differences in income between wealthy people in rich countries and their wealthy counterparts in the developing world are diminishing; places like China, Russia and India are home to lots of tycoons. For this latter group -- global high earners -- the potential gains are truly staggering. Globalization itself -- the fact that the entire human race increasingly is participating in market capitalism -- means there is far more wealth up for grabs than ever before. All things being equal, economically successful "winners" benefiting from a market of 6.5 billion souls will enjoy bigger paychecks than their counterparts from the days when the same market counted only 2 billion.

So, if you're living in a rich country and you don't count yourself among the ranks of the wealthy, you're undoubtedly going to find the income gap growing between you and the tycoon class, and the gap shrinking between you and the rest of the world's non-rich. We all gonna be one big happy proletariat!

What this scenario does not imply or require, however, is absolute declines in living standards. In other words, we might expect that over the long run, the wages of, say, Vietnamese workers will rise faster than those of Swedes or Americans, but Swedish and American wages (and, more importantly, Swedish and American living standards) can (and should) continue to grow in absolute terms.

In short, as long as you don't mind the fact that the salary gap between you and a CEO is likely to expand from today's differential of (say) 500 to (say) 3,000 in the year 2029, you've got an excellent chance of enjoying a higher standard of living that year than you do now. But in 2029 you're also likely to make only two times more than a Malaysian doing similar work, instead of six times like you do now.

BTW, we can't read the second part of the article without paying.

Here is the simple analysis that I would like to put forward. Please put a hole in it if you can.

Years ago commerce was local. Even companies that were globally connected needed a distribution network to get product to consumers. All along the way someone got a piece of the pie that was a successful company.

Communication and research was painstakingly slow. Many middle managers were employed in the aggregation of field data to present it to the top decision makers.

The internet and the global community changed this. Why is Bill Gates the richest man in the world. Because he makes a small percentage off every computer in the world.

Bill Gates employs much fewer people than he did before to check on the status of the world wide company.

I live in LA. I can get Maine Lobster, Chicago Beef, NY Pizza all delivered to my door fairly cheaply. No one involved in the transaction but a website and a delivery company.

Obviously you will be richer if you can get 1 percent of sales from a billion people than 1 percent of sales from one hundred thousand.

Why are professional atheletes making more? Because their product ( televised sports ), goes out to billions of people. You can charge a lot more for an ad which shows to a billion than one which is only shown to one hundred thousand.

In short, the amount of employees needed to sell something to a global audience has been drastically reduced by technology.

I am not worried. Although this creates a few ultra-ultra rich, the rise in standard of living from the availability of cheap goods is well worth the allowing the existence of some billionaires.

People complain about the lowering of median incomes based on constant dollars. This is baloney. The cost of living based on essential items may have indeed outpaced income, but the sheer amount of availability of what were once luxury items - Computers, multiple TVs, large cars with many features, digital devices - has far outpaced that. I guess when the economy is going well the dems have to find some place to complain. This economy is going really well, and only those who want to find some reason to not think that worry that the supper rich are getting richer.

Of course, it's not just a question of income, the other side to this is the huge accumulation of wealth.

Most of this has come by moving capital from shareholders hands into the mits of the geniuses who are running the companies and are rewarded through share options, etc. in a way that has been showen to have little to do with performance.

It's hard to argue with the capital gains accrued by entrepreneurs who hold the corporate shares and trully create wealth over time. Or who trade whole or large portions of companies after restructure. It is all to easy to see through the fraud of over-reward of mediocre and underperforming managemant.

Sean -- I'm not sure the diversity angle holds unless it coincides with a subservient majority. viz robber barons, 19-20th century. And at present, working class have substantially improved Repbublican election chances while labout laws have certainly moved to the benefit of capital over labor.

I think you are a little sensitive. For me, Repugnuts is reserved for the neocons; repugs for those with anti-social, piss-on-the-poor tendencies; I definitely like repiglicans above, although personally I'll coin repiglets as better since they like the trough so much. It's not like the Republican party are against using their own derogatory terms, now, is it?

In the future, wealthy private schools won't even lose football games to lowly land grant schools inhabited by students in plaid flannel shirts.

The more I think, the more I lilke "repiglets" for their tendency to suckle off the state with tax-breaks, corporate welfare and cosy contracts, as well as the trough of K-street, while crying "Wee, wee, wee" to the public about "free markets". It's all bull. Or sow's ears. Or something.

> Not how it works.
> That Bill Gates gets a lot more money doesn't
> take it away from the guy who sweeps the
> sidewalks, and if Bill Gates makes less money,
> the guy sweeping the sidewalk doesn't get a
> percentage of the leftovers.

I have worked in the computer industry for over 30 years. Sorry but what you said about Bill Gates and Microsoft is not true.

While Bill Gates and Microsoft did not take money directly out of the pocket of the street sweeper, they did take the money from thousands of small competitors. They did this by locking out these competitors from getting sales because Microsoft had already had it software preloaded on customers computers. The end result is Microsoft got the bulk of the sales regardless of product quality.

I have a list of hundreds of commercial software proucts for sale in late 80s to late 90s where the competitors besides losing all those sales also have to write off their investments in software development for thos products.

Stevens:

Recommended reading.

...I guess when the economy is going well the dems have to find some place to complain. This economy is going really well, and only those who want to find some reason to not think that worry that the supper rich are getting richer.

Posted by: John Hansen on October 29, 2006 at 1:13 AM | PERMALINK

Guess you forgot about Reagan's "rising tide" and GW's "benefit all"; GHW didn't get much of a look in. Then we have the deficits, AGAIN! Guess it'll take another Democratic administration to put that right, AGAIN!

This economy is only going "really well" for some.

Your comfortable analysis would be OK if our biggest single ticket item, housing, hadn't been going up by 2-5 times inflation, our second biggest item, health insurance, 2-4 times inflation, and I really don't see that vehicle prices have fallen and all their little gizmos have little effect on productivity.

In the later 90s, people outside the top 20% did get some real income growth, and, while Clinton was on the healthcare warpath, healthcare cost inflation abated -- then exploded again. Coincidence?

It seems pretty clear, this administration is all for wage cost suppression, labor union and labor, generally, weakness, don't give an F for healthcare coverage or the condition of the working or non-working poor. The only measure on their horizon is corporate profitability and party donations.

A lot of the comments above seem to equate income with wealth. These two are very different. Bill Gates, the wealthiest man in the world, had earned income (salary and bonus) of less than one million dollars a year in 2004. There are many 26-year-olds on Wall Street (and probably at Microsoft as well) who make more than that. Gates's income went up when Microsoft started paying a dividend -- but still, there are probably many people with much less wealth than Gates who have higher incomes today. (Gates's wealth, of course, comes from owning Microsoft stock -- which is assets).

I read somewhere that Michael Bloomberg, another billionnaire, was getting a salary equal to that of the lowest-paid employee of his company ($25,000 some years ago). He probably also got profit distributions, but he is rich mainly because of his business ownership.

On the other side of the scale, you have company executives and key employees with gigantic salaries. These salaries have grown uncontrollably and, as someone remarked above, many believe that this compensation is not really subject to a market process.

As also remarked above, globalization is also responsible: people at the corporate bottom are competing with workers in India and China, whereas top executives and traders are making new money from India and China. So globalization hurts the worker while it helps the executive.

But mdr3000, don't hold your breath until a revolution comes. Only mass unemployement or runaway inflation would cause a revolution -- but as long as there are jobs, no matter how little they pay, people will be happy with their cars, TVs, and DVD players.

I just watched a rerun of the Tennessee Senatorial debate between Ford and Corker.

The issue of economics is such a complicated one and so debatable that it's hard for them to debate it with 2 minute speeches. So, they said they'd balance the budget and Ford said he'd support a minimum wage increase. They both (I think) said we had to educate the kids. That's about as far as it went.

Government intervention in the economy of the country is a very sticky issue. It's undergone some major changes from the great Depression era to the great devolution since Ronald Reagan and the balancing act of Bill Clinton. Maybe one day in the distant future we can have a complete discussion on the issue, but for now it's hidden behind smoke and mirrors.

I did like that Ford brought values and pride into the debate and he took the very high ground with regard to the negative ads, particularly the sleazy one Corker had to pull off the air.

All-in-all the debate was very formal, covered a lot of ground, required the candidates to give terse relevant answers and was tense, but civil. It was one of the very best professionally run debates I've yet seen on t.v. this year.

My hope Ford wins probably doesn't shade my opinion of the debate much. I haven't followed their campaign much and don't have strong opinions of either candidate. I think Corker's voice is irritating, but Tennesseans might not mind it. I think Ford's color might bother as many Tennesseans as Corker's voice might bother. It was a slight ad to Ford I think, but not much more than that.

I'd like to see Al Gore give a great speech from Nashville to tip the balance in Ford's favor. I wonder how Ford and Tennesseans feel about Al these days.

Actually, the average MLB player is only a little bit better than the guys playing in triple-A, if you put them on the scale of all baseball players. The very best are quite a bit better, maybe 2 or 3 times as productive, but they get paid a lot more than 2 or 3 times as much.

Well, it took awhile but someone did finally respond to mdr3000, but JD missed the comment he made--no revolution soon, probably just a despair, etc. And I think a rereading of Marx really is in order. Where I see capital accumulation happening is in my friends' medical bills and insurance. Everyone I know either has giant medical bills or is hanging on to rotgut jobs (jobs where you have to drink lots of rotgut just to make it through the day) just to maintain insurance which, when the going gets tough--when expensive medical bills start rolling in--dissappears. Marx was right, and sooner or later, when the children can't arfford TVs, they'll revolt.

You're right, jim -- I got his point when I was reading his comment, but by the time I got to the bottom of the stack I remembered mainly his reference to revolution. My bad.

By the way, income inequality is not as extreme as assets inequality: The top 1%, the next 9%, and the remaining 90% each own one-third of the nation's wealth
Source: Kennickell, A. (2003). A Rolling Tide: Changes in the Distribution of Wealth in the U.S., 1989 to 2001. Washington, D.C.: The Federal Reserve Board. .

sooner or later, when the children can't arfford TVs, they'll revolt.

jim, to point out the obvious, there is no need to revolt these days. Just vote the bums out. (But as you probably know, many of the lowest-paid people in the US, and the ones with no assets, vote Republican because of gay marriage, supporting the troops, atc. The Red States are also the poorest states. I don't know what Marx would say about that.)

hayek --

http://www.theadvocates.org/celebrities/peter-thiel.html

I see Thiel's reading list for becoming a "libertarian" and just don't get it. Actually, I think he's like our friend "ex-liberal" and was always wired that way, just in some form of denial.

Writers Liebowitz and Margolis both are at the inaptly named Independent Institute, founded by libertarian David Theroux and self-admitted "way libertarian" Peter Thiel.

Actually, I think I'm way behind this wave. I hadn't quite realized that the term "libertarian" has been exclusively hijacked by fasco-capitalists?

How much do President Bush's tax and economic policies further enrich the upper crust?

It's sheer hypocrisy how the GOP's elite titans of industry get working class stiffs pissed off against the government in order to deflect attention from their own greed. How often have we heard Republican political and economic leaders warn, "The Democrats want to steal your money by raising your taxes," only to see these same leaders implement policies and laws that raise the tax burden on middle and low income families while reducing their own.

Furthermore, GOP industry titans have suppressed the hourly minimum wage at $5.15 for the last nine years. Because of inflation its value has fallen 20 percent, shrinking the real purchasing power of the minimum wage to its lowest level since 1955. A 40-hour work week is now worth only $10,700 per year. How does a working person build equity and move up the ladder when his boss supports economic policies that choke off savings? Where is economic growth supposed to occur?

The Republican elite have been robbing the Republican rank and file blind for years while marketing "big tent" issues such as support for the military, hatred of the Clintons, hatred of immigrants, abortion, flag burning and religion in the schools.

When the GOP elite say "Its your money" they really mean, "It's my money." Judging by the polls, in 2006 the rank and file of the GOP and the moderate Democrats are finally starting to see through this utterly cynical manipulation.

...and the share going to the richest one-hundredth of 1 percent has quadrupled.

Let's ask John Kerry how he did it. Oh yeah, gold digging marriages!

Quick question: who had more money?

a) John Kerry

b) George Bush

Bonus round: by how much?

a) Tenfold

b) One hundred fold

c) One thousand fold

Double bonus round: who payed more income taxes, as a percentage of income.

a) John Kerry

b) George Bush

c) George Bush by tenfold

d) George Bush by one hundred fold

Wow sporty79, such a rich trove of insight. You complete me.

Kathy is right for many of the top 1 percent, and ex-lib ignores that basic fact.

What he, Hawk and others even more blatantly ignore is this one word: "luck."

When bagazillionaires like Bill Gates testified earlier in this Congress about keeping the estate tax in place, they all mentioned some variant on the word "luck" as a significant factor in their getting rich.

Take Gates. Pure-D luck that IBM didn't sniff him out sooner. (Or Steve Jobs didn't sniff him out either, for that matter.)

One of the effects of globalism is the lost of the importance of a corporation’s local market.

Growing up in an old rustbelt city, I witnessed the demise of corporations as concerned neighborhood citizen. Companies like Champion Spark Plugs were truly community based.

Everyone from the janitors to the chairmen of the board, and most of the shareholders lived in our area. While these folk would never be confused with socialists, they seemed to care a great deal about the welfare of their workers since they were their neighbors. This was reflected in both working conditions and wage differentials.

JS,

jim, to point out the obvious, there is no need to revolt these days. Just vote the bums out. (But as you probably know, many of the lowest-paid people in the US, and the ones with no assets, vote Republican because of gay marriage, supporting the troops, atc. The Red States are also the poorest states. I don't know what Marx would say about that.)

He said "religion is the opiate of the people". I always thought that was one thing he was right about.

One way to start rectifying this is to stop taxing unearned income from dividends, capital gains, etc. at lower rates than earned income.

elmendorf tells us: "Two-thirds of Forbes' 400 top richest Americans did not inherit their wealth."

That's dicely deceptive.

That same Forbes report tells us those same two thirds did grow up in households worth more than a million bucks. It matters. No, Bill Gates hasn't inherited his wealth because his dad hasn't died yet (I don't think.) But he did grow up in a millionaire family and was well endowed with the perks of status before he ever wrote that 8 bit processor operating system. Go take a look at Ruby Payne's "A Framework for Poverty" to get an idea of what growing up in wealth versus growing up in poverty means. Better still put on your dreggiest duds and go stand on a corner begging for an afternoon - walk into a 7/11 dressed like that. You'll very quickly see how those in poverty get beat up from the get go in our free society.

Couldn't care less about this topic...I save my respect for those obscenely wealthy folks who actually USE their wealth to make the world a better place for their fellowman. Not those who accrue their toys and set their agendas to destroy the rights and lives of others (especially those hypocrites who do it in the name of JESUS). They can't take it with them any more than I can and you can only wear one pair of shoes at a time...so they are THE PROBLEM...seldom part of the solution unless they practice some charitable behaviors!

I think you ought to separate the top 1% into two groups; the entrepreneurs -- Bill Gates, George Lucas, even Warren Buffett -- who very few people begrudge their wealth, as opposed to the paper shufflers -- Dick Grasso trying to pay himself $180 million for running the NY Stock Exchange, for example.
I would say this problem has roots in the 1960's where two trends started to merge. First is what I would call the free agency myth. Following in the steps of those truly able to demand economic rent due to their unique status - Muhammad Ali, Joe Namath or Curt Flood, for example - the cartel unions like the baseball players, longshoremen or airline pilots went hog wild with their wage demands. Following right on their footsteps were the Board of Directors/CEO cartels, who felt they deserved rent seeking profits as much as any jock.
The concurrent trend was the erosion of any sence of fiduciary duty, the fusty old unwritten rules where a good employee could depend on his job or shareholders could expect management to show deference to their interests. I blame this on the rise of the MBA as office prima donna, and I think the most egregious examples are in the so-called "not for profit" sector. A good example would be [and someone from Washington Monthly should do a story on] the trustees of the "nonprofit" Blue Cross/Blue Shields around the counrtry cashing out while selling out their subscribers.

minion of rove,

I doubt Washington Monthly is going to take a hard look at "non-profits" anytime soon.

Ed D.,

If you are still going to begrudge those like Bill Gates their wealth, how about elmendorf's other point? Plenty of those richest 1% give more to the Democratic Party, so explaining income inequality is a little more complicated. Here's just a sample of donations from that link:

Paul Allen, Microsoft co-founder, 81% to Dems

Ron Burkle, supermarket magnate, 98% to Dems

David Geffen, Dreamworks co-founder, record producer, 88% to Dems

Leona Helmsley, hotel developer/operator, 100% to Dems

Steve Jobs, Apple Computer CEO, 100% to Dems

Joan Kroc, philanthropist, 97% to Dems

Charles Kushner, real estate developer, 97% to Dems

George Lucas, filmmaker, 100% to Dems

Pierre Omidyar, eBay founder, 75% to Dems

Ron Perelman, businessman, 66% to Dems

Sumner Redstone, Viacom chairman, 66% to Dems

Steven Spielberg, filmmaker, 93% to Dems

Oprah Winfrey, talk show host, 94% to Dems

Jerry Yang, Yahoo! co-founder, 80% to Dems

Do I even have to mention George Soros and Ted Turner? That article linked by JS is very enlightening as well.

Chuck,

I agree 100% - this is not a site that would endulge in Sista Soulja-type analysis. I've frequently pointed out how The Weekly Standard or National Review will commit some apostacy (exposure of Jack Abramoff being the best example) while WM continues to goose-step to the Dem Party line.

Yeah, but you suck dirty green donkey dicks in Hell, minion of rove.

A joke for you:

George W. Bush was out jogging one morning when he tripped, fell over a bridge railing and landed in the creek below. Before the Secret Service guys could get to him, three kids who were fishing, pulled him out of the water. Bush was so grateful he offered the kids whatever they wanted.

The first kid said, "I sure would like to go to Disneyland." George said, "No problem. I'll take you there on Air Force One."

The second kid said, "I really need a new pair of Nike Air Jordan's." George said, "I'll get them for you and even have Michael sign them!"

The third kid said, "I want a motorized wheelchair with a built-in TV and stereo headset!!" George Bush is a little perplexed by this and says, "But you don't look like you are injured or handicapped."

The kid says, "I will be after my dad finds out I saved your ass from drowning!"

The mystery that Chait describes is that the richest of the rich seem to be getting richer and richer though no one else is. Economists can't figure out why. It isn't the policies of the government (though tax cuts for the uber-wealthly exacerbate it.) It obviously isn't because the top 1% is significantly smarter, hard-working than the next 4% (say) though they may be luckier--they happen to land on economic gold mines while the rest of us are sitting on sod.

My proposal is that it is a side-effect of compound interest and the miracle of exponential functions. Their wealth is invested and growing faster than they can spend it. That million dollars invested wisely becomes two million in no time at all. And two becomes four, and so one. This would account for the differences among the uber rich, as well. At some point, with sufficient excess, you reach a sweet point. Once you get there, you are protected from the market and your wealth just grows exponentially.

Meanwhile, all the rest of us are scraping by, trying to save that first $10,000, or $100,000, or $1,000,000. No sweet point in sight.

Income inequality is always resented.

An artist friend of mine was so poor that he had to go out and make chalk drawings on a sidewalk to get some money, any money. He chose a spot with good traffic already being worked by panhandlers, just moving down from them to be unconfrontational. He made good money. So one of the panhandlers came over to him and snarled, "Why don't you get a real job?"

To me there's just something intuitively repugnant to the idea of tax cuts to the rich. There are people in our society who stay out of the public eye for the most part, who enjoy a lifestyle and financial security that the rest of us only fantasize about. Their wealth provides them with power and influence on the political process far beyond what majority of the population has. Yet the republican approach to economics is to reward these people with even more wealth, via tax cuts. I really don't know if the approach is effective or not (everything I've read suggests it's marginal at best) , but it's definitely morally repugnant.

Avenger,

I hate the color green.

PTate in MN,

Even in the U.S., if you have $1 million in savings, that's pretty much a sweet spot.

The Liberal Avenger,

Yeah, that was very funny about the President of the United States almost drowning. Have you seen that new movie, full of jokes and laughs, about Bush's assassination yet?

minion of rove,

You do know that Washington Monthly is a "non-profit" too, right?

Ed D.,

This is from the list of "celebrities" who have given 100% to Dems:

Ansel Adams, Ben Affleck, Jessica Alba, Jason Alexander, Joan Allen, Krista Allen, Kirstie Alley, Louie Anderson, Paul Thomas Anderson, Julie Andrews, Marc Anthony, Christina Applegate, David Arquette, Jules Asner, John Astin, Richard Avedon, Dan Aykroyd, Lauren Bacall, Diedrich Bader, Anita Baker, Drew Barrymore, Kim Basinger, Justine Bateman, Ned Beatty, Harry Belafonte, Robert Beltran, Tony Bennett, Tom Berenger, Candice Bergen, Valerie Bertinelli, David Blaine, Robert Blake, Michael Bolton, Barry Bostwick, Peter Boyle, Lorraine Bracco, Zach Braff, Amy Brenneman, Lloyd Bridges, Matthew Broderick, Adrien Brody, James Brolin, Albert Brooks, Mel Brooks, Pierce Brosnan, Jimmy Buffett, Carol Burnett, Ken Burns, Nicolas Cage, James Cameron, John Candy, Tia Carrere, David Caruso, Dan Castellaneta, Michael Chabon, Michael Chiarello, Tommy Chong, Deepak Chopra, Patricia Clarkson, George Clooney, Enrico Colantoni, Sean 'Diddy' Combs, Ry Cooder, Francis Ford Coppola, Courteney Cox, Cindy Crawford, Michael Crichton, David Crosby, Marcia Cross, Sheryl Crow, Cameron Crowe, and Tom Cruise.

That is only "Names A - C" and doesn't include some who gave A LOT (like Steve Bing who "only" gave 87% of his total $11,019,719 in donations to Dems, 0% to GOP, and 13% to "other"). You can view the rest at that link above.

PTate in MN, as usual, is spot on.

I have an idea: Maybe its because there are a few people out there who are really good at making money, in a time of changing technology that gives them opportunities. And they are doing it in a country that (mostly) does not act like savages who feel the need to loot from the richest person around just because they can.

Wow, John Candy, is giving to the DNC. Any word on Rudolph Valentino?

stupid git,

The list includes "celebrities" (actors, musicians, authors, icons) who "have given" (past tense) 100% to "Dems" (I will assume you know which party that is). Kinda goes to the point being made by those like sparky above about buy yourself a political party.

By the way, why do we care? I guess if it was a zero-sum economic world, and people getting richer meant everyone else was getting poorer, it might matter. But the world does not work that way. Not even close. Paris Hilton gets rich, but I'm doing fine, so why do I care one bit? Why do you care?

And, if you really think that the economic world is zero-sum, and rich getting richer mean we are poorer, then you are just as screwed up as any conservative who denies evolution. Economics is as much of a science as evolution, and it is just as much a crime against reality to ignore it as to ignore Darwin.

coyote,

They care because the Democrats have been better at hiding the fact they are bought and paid for, just like the Republicans. Class warfare works on some levels. It makes for good political advertising directed at the masses.

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