Kevin Drum: Why Income Matters

Post #333,267 by Another Scott 9/28/10 7:18:39 AM Reply	Kevin Drum: Why Income Matters http://motherjones.c...hy-income-matters [...] This second question is purely one of income and wealth distribution. I just want to know how money flows to different classes of people. Because while it's reasonable to say that a particular industry can be a growth driver during some particular period Â electricity in the early 20th century, cars during the middle, and computers later on, for example Â it's not really reasonable to say that a particular income class is a growth driver. Does anyone really think that 30 years ago rich people suddenly became more responsible for economic growth than the poor or the middle class? I don't, and the comparative international evidence doesn't suggest it either. Rather, I think the rich in America have simply managed to reengineer our political and economic institutions to suppress middle class income, thus producing a vast pool of money that flows in their direction. As a result, their share of national income becomes ever more swollen. And this is horribly corrosive. I believe pretty strongly that a modern mixed economy can remain healthy only if prosperity is broadly shared, economic values are widely regarded as fair, and the middle class is becoming steadily wealthier. If that stops happening over an extended period of time it spells trouble on a whole bunch of fronts. The middle class becomes alienated and discouraged. The rich wall themselves off from the rest of us. The political process becomes increasingly co-opted. Boom and bust cycles become ever more pronounced. You can mask this, of course. Technological improvements can make life better even with a stagnant income. Globalization can make low-end consumer goods seemingly cheaper. The rich can loan money to the middle class Â for a while. Government programs can redistribute wealth a bit. But those are just band-aids. The real long-term problem is that the fruits of economic growth are being increasingly funneled to a small group of the super rich in the first place. This just isn't sustainable without becoming a banana republic. Eventually, if we want a prosperous society, the private economy needs to distribute economic growth reasonably equitably in the first place. [...] Yup. Nothing terribly controversial for people who spend time thinking about the issue, but there are too few of them these days. See the original for embedded links. Cheers, Scott.
Post #333,268 by beepster 9/28/10 7:39:23 AM Reply	Nothing controversial except the vast right-wing conspiracy. Sure, understanding today's complex world of the future is a little like having bees live in your head. But...there they are.
Post #333,269 by Another Scott 9/28/10 7:51:31 AM Reply	I missed that. He blames the Trilateral Commission and the Bilderburgs? :-/ Cheers, Scott.
Post #333,276 by boxley 9/28/10 8:49:14 AM Reply	piece missed out a welfare family of four receives about 30k the working poor receives much less what is the incentive to work? Any opinions expressed by me are mine alone, posted from my home computer, on my own time as a free American and do not reflect the opinions of any person or company that I have had professional relations with in the past 55 years. meep
Post #333,277 by drook 9/28/10 9:08:47 AM Reply	It's not about welfare and poverty The article is talking about the middle class. If you don't want to have that conversation, fine, but don't pretend you're engaging in the conversation while trying to change the subject. -- Drew
Post #333,279 by boxley 9/28/10 9:20:46 AM Reply	sorry I think $30k is middle class and 200k is rich I must be a democrat Any opinions expressed by me are mine alone, posted from my home computer, on my own time as a free American and do not reflect the opinions of any person or company that I have had professional relations with in the past 55 years. meep
Post #333,289 by drook 9/28/10 10:16:40 AM Reply	That's the problem First, median household income in 2007 was a bit over $50k -- http://en.wikipedia....the_United_States -- so $30k is on the lower edge of "middle class". But the point of that article is that the middle class isn't getting anywhere, while the top few percentiles are getting all the benefits. From '67 to '03 median income (in adjusted dollars) had risen from $33k to $43k -- ~30%. But the income of the 95th percentile had risen from $88k to $154k -- ~75%. http://en.wikipedia....ion_1967-2003.svg If you look at the chart showing 1947-2007 -- http://en.wikipedia....ion_1947-2007.svg -- you can see that everyone's income improving at about the same rate until about 1970. Then the lower percentiles flatline while the top ones keep going up. And the higher you start, the steeper you keep going up. So the story isn't about poverty, or welfare, or the exact definition of "middle class". The story is that for the decades after WWII all income groups were benefiting at about the same rate. Then starting in the 70s, the wealthy have been getting wealthier. And the wealthier you are, the more you improve each year. -- Drew

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