Real vs Income Inequality...

[JayB]

From the Economist.

 

"IN 1904 Willie Vanderbilt hit a thrilling 92.3 mph (147.7 kph) in his new German motorcar, smashing the land-speed record. His older brother's sprawling North Carolina manse, Biltmore, could accommodate up to 500 pounds of meat in its electrical refrigerators. In miserable contrast, the below-average Gilded Age American had to make do with a pair of shoes and a melting block of ice. If he could somehow save enough for an icebox, a day's wage would not have bought a pound of meat to put in it. Paul Krugman, of Princeton University, has recently argued* that contemporary America's widening income gap is ushering in a new age of invidious inequalities. But a peek at the numbers behind the numbers suggests that Mr Krugman has been misled: far from a new Gilded Age, America is experiencing a period of unprecedented material equality.

 

This is not to deny that income inequality is rising: it is. But measures of income inequality are misleading because an individual's income is, at best, a rough proxy for his or her real economic wellbeing. Because we can save, draw down savings, or run up debt, our income may tell us little about how we're faring. Consumption surveys, which track what people actually spend, sketch a more lifelike portrait of the material quality of life. According to one 2006 study**, by Dirk Krueger of the University of Pennsylvania and Fabrizio Perri of New York University, consumption inequality has barely budged for several decades, despite a sharp upswing in income inequality.

 

But consumption numbers, too, conceal as much as they illuminate. They can record only that we have spent, but not the value—the pleasure or health—gained in the spending. A stable trend in nominal consumption inequality can mask a narrowing of real or “utility-adjusted” consumption inequality. Indeed, according to happiness researchers, inequality in self-reported “life satisfaction” has been shrinking in wealthy market democracies, America included, suggesting that the quality of lives across the income scale are becoming more similar, not less.

 

You can see this levelling at work in markets for transport and appliances. You no longer need be a Vanderbilt to own a refrigerator or a car. Refrigerators are now all but universal in America, even though refrigerator inequality continues to grow. The Sub-Zero PRO 48, which the manufacturer calls “a monument to food preservation”, costs about $11,000, compared with a paltry $350 for the IKEA Energisk B18 W. The lived difference, however, is rather smaller than that between having fresh meat and milk and having none. Similarly, more than 70% of Americans under the official poverty line own at least one car. And the distance between driving a used Hyundai Elantra and a new Jaguar XJ is well nigh undetectable compared with the difference between motoring and hiking through the muck. The vast spread of prices often distracts from a narrowing range of experience.

Save money. Live better

 

This compression is not a thing of the past. To take one recent example, Jerry Hausman of the Massachusetts Institute of Technology and Ephraim Leibtag of the United States Department of Agriculture, show† that Wal-Mart's move into the grocery business has lowered food prices. Because the poorest spend the largest part of their budget on food, lower prices have benefited them most. The official statistics do not capture these gains.

 

As a rule, when the prices of food, clothing and basic modern conveniences drop relative to the price of luxury goods, real consumption inequality drops. But the point is not that in America the relatively poor suffer no painful indignities, which would be absurd. It is that, over time, the everyday experience of consumption among the less fortunate has become in many ways more similar to that of their wealthier compatriots. A widescreen plasma television is lovely, but you do not need one to laugh at “Shrek”.

 

This compression is the predictable consequence of innovations in production and distribution that have improved the quality of goods at the lower range of prices faster than at the top. New technologies and knock-off fashions now spread down the price scale too fast to distinguish the rich from the aspiring for long.

 

This increasing equality in real consumption mirrors a dramatic narrowing of other inequalities between rich and poor, such as the inequalities in height, life expectancy and leisure. William Robert Fogel, a Nobel prize-winning economic historian, argues†† that nominal measures of economic well-being often miss such huge changes in the conditions of life. “In every measure that we have bearing on the standard of living...the gains of the lower classes have been far greater than those experienced by the population as a whole,” Mr Fogel observes.

 

Some worrying inequalities, such as the access to a good education, may indeed be widening, arresting economic mobility for the least fortunate and exacerbating income-inequality trends. Yet even if you care about those aspects of income inequality, the idea can send misleading signals about the underlying trends in real consumption and the real quality of life. Contrary to Mr Krugman's implications, today's Gilded Age income gaps do not imply Gilded Age lifestyle gaps. On the contrary, those intrepid souls who make vast fortunes turning out ever higher-quality goods at ever lower prices widen the income gap while reducing the differences that matter most."

[dmuja]

 

guilty conscience?

[Crux]

Straw men suffer no guilt.

[JayB]

Selected from the above for extra emphasis:

 

"To take one recent example, Jerry Hausman of the Massachusetts Institute of Technology and Ephraim Leibtag of the United States Department of Agriculture, show† that Wal-Mart's move into the grocery business has lowered food prices. Because the poorest spend the largest part of their budget on food, lower prices have benefited them most. The official statistics do not capture these gains."

 

 

[billcoe]

Nice point Jayb. It is a good time to be alive, we live better than the kings of old.

[JosephH]

It's just not a good time to live a long time or to get ill while doing it, unless of course you are one of the folks whom are benefiting from the very real income inequalities. Expanded lifespans and complexities of living in today's world roll up a myriad of costs which are glossed over in the tripe above. The vast majority of Americans are living one healthcare crisis from disaster. And, as of last week when the Bushies rolled over for big business and labor by yanking post-65 healthcare benefits, living a long life is about the most dangerous thing you can look forward to.

 

The American 'middle-class' has been systematically mugged, raped, and pillaged for the past seven years in governmental and regulatory ways that will take a decade or more to reverse. Little abberations like the subprime fiasco - hell, give with one hand, take back with the other. Never since, well, Vanderbilt, have the wealthiest so preyed on the least capable in society. Only now that the house of cards has fallen - who gets the relief? Oh my, you guessed it - the wealthy who knew they were robbing the poor all the while they were doing it.

 

And those payday lending storefronts which have popped up around the country like a disease? Now there's a sure sign of prosperity and income equality, and good service to boot! All backed in one legal firewall by all the largest banks in the country. But hey, it all works out. Those folks who are getting squeezed on their mortgages are all going to the payday lending shops in a vain attempt to cover themselves with the very same banks that [briefly] held and profited off their mortgages in the first place. Can't beat that, take'em on the way up and the way down.

 

Fortunately, Krugman isn't easily fooled, reguardless of the endless and pathetic attempts by the administration and republicans in general to do just that. Actually, I suspect he would like a bit more challenge out of them as so far they've mostly been a long serious of bad jokes - on the American public, that is. Fuck, these are just the sort of fairy tales republicans and neocons tell themselves to feel good about themselves until they're crying like bitches when their disasterout wars and 'economic' policies [inevitably] go way south.

[ClimbingPanther]

Wasn't fatness a symbol of wealth back in the day? Shoot, 2/3 of America is fat! We're wealthy alright, all the way down to the poor fatso who can't afford cable.

[dmuja]

 

Us lowly working class folk are oh so grateful that Walmart CEO Mista "H".Lee Scott got his $22,000,000 stock bonus, he worked so hard for it bless his heart! If not for him (Bossman Mr. H and his great generosity) we lowly folk would have record levels of debt, be in danger of foreclosure and could not afford our crappy fake health insurance. An I sho knows I don't need no real income to buy a house. Shoot, I aint got no business tryin to live in Seattle any how. I know my place.

 

I thanks ya fo settin me straight Mista Bossman Jay!

[JayB]

(Bill)Couldn't agree more.

 

One of the more striking differences that I noticed while out here on the Least Coast has to do with graveyards. It's not terribly difficult to come across graveyards that date to ~1650-1750 out here, and the first thing that I noticed was the cluster of little headstones surrounding the big ones.

 

In one case there were something like eleven little tombstones surrounding a cluster of four larger ones, one of which belonged to the father. The others which belonged to his three wives, two of who died in their late-teens or early twenties. Given that they died within days or weeks of one of the little headstones marking the graves of the children, it's reasonable to assume that they died of complications associated with childbirth.

 

This was quite a change from the landscapes of the dead that I was accustomed to seeing, growing up on the West Coast as I did, and only playing close attention to the graveyards bearing the remains of the folks in my family who died after WWII.

 

 

[JayB]

It's just not a good time to live a long time or to get ill while doing it, unless of course you are one of the folks whom are benefiting from the very real income inequalities. Expanded lifespans and complexities of living in today's world roll up a myriad of costs which are glossed over in the tripe above. The vast majority of Americans are living one healthcare crisis from disaster. And, as of last week when the Bushies rolled over for big business and labor by yanking post-65 healthcare benefits, living a long life is about the most dangerous thing you can look forward to.

 

The American 'middle-class' has been systematically mugged, raped, and pillaged for the past seven years in governmental and regulatory ways that will take a decade or more to reverse. Little abberations like the subprime fiasco - hell, give with one hand, take back with the other. Never since, well, Vanderbilt, have the wealthiest so preyed on the least capable in society. Only now that the house of cards has fallen - who gets the relief? Oh my, you guessed it - the wealthy who knew they were robbing the poor all the while they were doing it.

 

And those payday lending storefronts which have popped up around the country like a disease? Now there's a sure sign of prosperity and income equality, and good service to boot! All backed in one legal firewall by all the largest banks in the country. But hey, it all works out. Those folks who are getting squeezed on their mortgages are all going to the payday lending shops in a vain attempt to cover themselves with the very same banks that [briefly] held and profited off their mortgages in the first place. Can't beat that, take'em on the way up and the way down.

 

Fortunately, Krugman isn't easily fooled, reguardless of the endless and pathetic attempts by the administration and republicans in general to do just that. Actually, I suspect he would like a bit more challenge out of them as so far they've mostly been a long serious of bad jokes - on the American public, that is. Fuck, these are just the sort of fairy tales republicans and neocons tell themselves to feel good about themselves until they're crying like bitches when their disasterout wars and 'economic' policies [inevitably] go way south.

 

Are you including yourself in this picture, Joseph? If not - why not? How is it that you haven't wound up as another exhibit A in this descriptive summary?

 

How many people alive today would trade places with *any* of their ancestors if they could?

[JosephH]

For two years I lived in c.1798 cape in a small town of 400 in NH settled in 1758 that the railroads passed by and we were next door to the original c.1770's church and cemetary. Examining those headstones showed most all women either died in childbirth or lived to be fairly old - (50's - 70's). It would appear the death rate from childbirth as seen in the stones was very high, I just guessing bordering on 40-50%. Being pregnant must have been a frightening affair.

[JosephH]

I'm self-employed, squandered way more than just my youth climbing and now will be working til I die to pay for my sins...

[KaskadskyjKozak]

Us lowly working class folk...

 

Assuming you are really a "lowly working class" grunt, you can be assured that a person living in the US 70 years ago in your same percentile of income (or wealth - pick your metric) was doing a hell of a lot worse than you are. They'd be lucky to afford shoes for their kids and rent, yet alone expensive climbing gear and recreational hobbies, you jackass.

 

[JayB]

"I'm self-employed, squandered way more than just my youth climbing and now will be working til I die to pay for my sins... "

 

I don't get the idea that you were born rich - yet it sounds as though you are working independently as a programmer/consultant and bill at a pretty healthy hourly rate for your services. What gives?

[Hugh Conway]

Ummm, Walmart CEO got nothing on Steven Schwarzman.

 

And for income inequality, try one Mukesh Amabani's new pied a tierre. I wonder if its high enough to escape the stink of dead bodies in the Mumbai slums?

 

[KaskadskyjKozak]

And for income inequality...

 

how about a fat fuck who milked the capitalist system he spits on to make his fortune so he can sit at home "doing whatever the fuck he wants" - sipping martinis, climbing, and skiing, living like a king, and brags about it? how's that for income inequality, tittie boy?

 

[Hugh Conway]

And for income inequality...

 

how about a fat fuck who milked the capitalist system he spits on to make his fortune so he can sit at home "doing whatever the fuck he wants" - sipping martinis, climbing, and skiing, living like a king, and brags about it? how's that for income inequality, tittie boy?

 

still bitter?

 

I'll make sure the Maybach driver pelts you with cold rain on your bike ride home tonight. Or if it helps I'll remind you the free marketers creedo "if you are wealthier you are obviously smarter and just down right better - poor people suck"

[ClimbingPanther]

freedom begets inequality. deal with it.

[KaskadskyjKozak]

freedom begets inequality. deal with it.

 

lack of freedom also begets inequality.

[dmuja]

you jackass.

 

Hey Ass clown,

 

Save your cute names for a personal meeting sometime , then we'll see ok?

 

BTW, My Father worked in a factory (back when 'Merika still made stuff as opposed to "outsourced") raised a family of 6, had a 6 bedroom home, had a boat ("boot" in Canadian), an airplane, good health insurance and a good pension (not a 401k). Shit changes, I know, but try doing that much today.

 

Next time though, that you drive down a well maintained street with little pink houses and picket fences take note and say to your self "I am so grateful for that era and for unions, and for the working middle class. I am so grateful that "Merika is not a freemarket fascist state because this nice middle class neighborhood that I am driving through may well be a very dangerous place for somweone like me if things were otherwise.

 

And say to youself, "I am so greatful to have the oporunity to vote for a guy like Obama who will gain worldwide respect, close the inequities in this potentially great society and will help all the rest of us continue to prosper.

 

On second thought, just be grateful for the right reasons you pig.

[KaskadskyjKozak]

you jackass.

 

Hey Ass clown,

 

Save your cute names for a personal meeting sometime , then we'll see ok?

...

 

you pig.

 

sorry fuckwad, but I'll dish it out right back at you.

 

 

BTW, My Father worked in a factory (back when 'Merika still made stuff as opposed to "outsourced") raised a family of 6, had a 6 bedroom home,...

 

Yes, most of us have similar stories to tell. You are hardly some "working class poor" as you tried to posture in your little sanctimonious pontification attacking JayB's post, and whatever your income bracket, compared to your parents and grandparents you're doing pretty damn good. Isn't that exactly what Jay's post was about? Yep.

 

Now go lick sack.

 

 

[quicker_than_ewe]

 

Now go lick sack.

 

 

Bold words from Fairyfeather's sex slave.

[KaskadskyjKozak]

 

Now go lick sack.

 

 

Bold words from Fairyfeather's sex slave.

 

Happy birthday, sheep shagger!

[quicker_than_ewe]

Didn't mean to offend. Drunk right now.

[KaskadskyjKozak]

Didn't mean to offend. Drunk right now.

 

offend? it's spray, man.