I put the following together in the hope that all of you will respond with your opinions of whether you view inequity of wealth distribution as a serious concern...in the US, the top ten percent hold 70 percent of all assets, and trending to still greater inequity.
I know that some of you have no use for me, but this is not about me, and neither is the info in this post. It's about what kind of a country you want to live in and leave to your children. If we continue on the present course, those of you who have lived in Manhattan have some idea how the rest of the country will probably look like, more and more. A noticeably affluent class, and a larger, but less visible, "attending", or "servant" class, at least in areas that are sought after places to live and work in....
Do you dismiss rising wealth inequity, especially to the degree and trend now experienced in the US, as a potential threat to social order, and to orderly "on schedule" elections, in the future?
Is there some point of even greater inequity, say....when the wealthiest ten percent own 80 percent of all assets in the US, where you predict that you might become more concerned that it is a serious problem, than you are now?
....and, if you are concerned about rising wealth inequity, <h3>besides progressive taxation, how do you see society remedying the inequity, to any significant and timely extent?</h3>
Do you see the US as a place with more in common socially, economically and in the "world view" area, with the countries in the US gini co-efficient "neighborhood, i.e., with Mexico, China, etc/, or with countries with much lower and dramatically lower wealth inequity, Japan, the UK, Canada, France, Germany, and down, down, down, on the gini scale, down to Sweden, Norway, and Denmark?
One question for all 16 of you. Do you view your politics to be the principle influence that has put and maintains the US in it's "gini neighborhood", as the politics of folks in Denmark and France keep those countries in the gini neighborhood that they are in? If you don't think you're responsible, collectively, can you accept that the combination of who you vote for and your "it's okay to be very rich and no compensation for the work you do is too extreme", POV, has something to do with US wealth inequity placing it where it is compared to other over developed countries?
I disagree with the way you answered question #4
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4 - do you believe that part of the role of taxation is to redistribute resources more equally?
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...and I see wealth inequity and the continued trend as a grave threat to our society and our representative govenrment. I believe that progressive taxation is the only way to lower the US gini number at least to the level of Japan's, say....within ten years, or, to even halt the current trend.
I am ashamed and disappointed to see the "gini neighborhood" that the US is in. Since we know that living conditions rise appreciably when the gini number in an over developed country is in the mide 20's to low 30's, for the overwhelming majority, and a gini number above 45 potentially triggers social unrest and threatens the democratic election process, I'm hoping I can influence just one of you to become more concerned about wealth inequity in the US....
Quote:
http://papers.ssrn.com/sol3/papers.c...ract_id=984330
Inequality and institutions in the U.S.
by Frank Levy and Peter Temin
....Many economists attribute the average worker’s declining bargaining power to skill-biased technical change: technology, augmented by globalization, which heavily favors better educated workers. In this explanation, the broad distribution of productivity gains during the Golden Age is often assumed to be a free market outcome that can be restored by creating a more educated workforce.
We argue instead that the Golden Age relied on market outcomes strongly moderated by institutional factors....
...we argue that institutions and norms affect the distribution of economic rewards as well as their aggregate size. Our argument leads to an explanation of earnings levels and inequality in which skill-biased technical change, globalization and related factors function within an institutional framework. In our interpretation, the recent impacts of technology and trade have been amplified by the collapse of these institutions, a collapse which arose because economic forces led to a shift in the political environment over the 1970s and 1980s. If our interpretation is correct, no rebalancing of the labor force can restore a more equal distribution of productivity gains <h3>without government intervention and changes in private sector behavior.</h3> ...
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Quote:
http://delong.typepad.com/sdj/2006/0...g_forces_.html
August 20, 2006
Driving Forces Behind Rising Income Inequality: Tracking the Internet Debate
...In a nutshell: Is the statement that there is a higher return to education today merely an assertion that the rich today earn more in relative terms than their counterparts in the past? Or is it also a statement that the rich today are more productive in relative terms than their counterparts in the past?
Andrew Samwick takes the first definition, and concludes that rising inequality is the result of a higher return to education. By his lights, he is clearly correct.
Paul Krugman and Mark Thoma take the second definition and conclude that that rising inequality is not primarily the result of a higher return to education but instead primarily the result of socio-political factors that have raised the relative price of what the rich and well-educated do. And they too have a strong case. Piketty and Saez's latest numbers estimate that top 13,000 American households have multiplied their relative real incomes nearly fivefold since the 1970s. Then they received some 0.6% of national income. Now they receive nearly 2.8% of national income--an average of $25 million each, compared to roughly $5 million each had the relative income distribution remained at its 1970s levels. <h3>What are the CEOs, CFOs, COOs, elite Hollywood entertainers, investment bankers, and the very highest levels of professionals doing differently now in their work lives that makes them, in relative terms, worth five times as much as their predecessors of a generation and a half ago?....</h3>
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https://www.cia.gov/library/publicat...elds/2172.html
<h3>Field Listing - Distribution of family income - Gini index</h3>
............. Gini
Denmark .........23.2 (2002)
Norway ...... 25.8 (2000)
Sweden ...... 25 (2000)
France ....... 26.7 (2002)
Finland ...... 26.9 (2000)
Czech Republic . 27.3 (2003)
Germany ...... 28.3 (2000)
Netherlands .... 30.9 (2005)
Austria ........ 31 (2002)
European Union .31.6 (2003 est.)
Canada ...... 32.6 (2000)
Belgium .......33 (2000)
Switzerland .....33.7 (2000)
Ireland ...... 34.3 (2000)
Spain ...... 34.7 (2000)
Australia ......35.2 (1994)
Korea, South ....35.8 (2000)
United Kingdom ..36 (1999)
Italy ...... 36 (2000)
New Zealand .....36.2 (1997)
Japan ...... 38.1 (2002)
Israel ...... 38.6 (2005)
Quote:
http://www.nytimes.com/2007/03/29/bu...f=sloginincome
Income Gap Is Widening, Data Shows
Article Tools Sponsored By
By DAVID CAY JOHNSTON
Published: March 29, 2007
....The top 10 percent, roughly those earning more than $100,000, also reached a level of income share not seen since before the Depression.
While total reported income in the United States increased almost 9 percent in 2005, the most recent year for which such data is available, average incomes for those in the bottom 90 percent dipped slightly compared with the year before, dropping $172, or 0.6 percent.
The gains went largely to the top 1 percent, whose incomes rose to an average of more than $1.1 million each, an increase of more than $139,000, or about 14 percent.
The new data also shows that the top 300,000 Americans collectively enjoyed almost as much income as the bottom 150 million Americans. Per person, the top group received 440 times as much as the average person in the bottom half earned, nearly doubling the gap from 1980.
Prof. Emmanuel Saez, the University of California, Berkeley, economist who analyzed the Internal Revenue Service data with Prof. Thomas Piketty of the Paris School of Economics, said such growing disparities were significant in terms of social and political stability.
“If the economy is growing but only a few are enjoying the benefits, it goes to our sense of fairness,” Professor Saez said. “It can have important political consequences.”......
http://elsa.berkeley.edu/~saez/piketty-saezOUP04US.pdf
Page #1
November 2004
INCOME INEQUALITY IN THE UNITED STATES, 1913-2002*
THOMAS PIKETTY, EHESS, Paris
EMMANUEL SAEZ, UC Berkeley and NBER
This paper presents new homogeneous series on top shares of income and
wages from 1913 to 2002 in the United States using individual tax returns data.
Top income and wages shares display a U-shaped pattern over the century. Our
series suggest that the large shocks that capital owners experienced during the
Great Depression and World War II have had a permanent effect on top capital
incomes. We argue that steep progressive income and estate taxation may have
prevented large fortunes from fully recovering from these shocks....
Page #24
...Changing social norms regarding inequality and the acceptability of very high wages might partly explain
the rise in U.S. top wage shares observed since the 1970s.40
V. CONCLUSION
This paper has presented new homogeneous series on top shares of
income and wages from 1913 to 2002. Perhaps surprisingly, nobody had tried to
extend the pioneering work of Kuznets [1953] to more recent years. Moreover,
important wage income statistics from tax returns had never been exploited
before. The large shocks that capital owners experienced during the Great
Depression and World War II seem to have had a permanent effect: top capital
incomes are still lower in the late 1990s than before World War I. We have
tentatively suggested that steep progressive taxation, by reducing the rate of
wealth accumulation, has prevented the large fortunes to recover fully yet from
these shocks. The evidence for wage series shows that top wage shares were
flat before World War II and dropped precipitously during the war. Top wage
shares have started recovering from this shock only since the 1970s but are now
higher than before World War II.
To what extent is the U.S. experience representative of other developed
countries’ long run inequality dynamics? Existing inequality series are
unfortunately very scarce and incomplete for most countries,41 and it is therefore
very difficult to provide a fully satisfactory answer to this question. However, it is
Page #25
interesting to compare the U.S. top income share series with comparable series
recently constructed for France by Piketty [2001a, 2001b], and for the United
Kingdom by Atkinson [2001]. There are important similarities between the
American, French, and British pattern of the top 0.1 percent income share
displayed on Figure XII.42 In all three countries, top income shares fell
considerably during the 1914 to 1945 period, and they were never able to come
back to the very high levels observed at the eve of World War I. It is plausible to
think that in all three countries, top capital incomes have been hit by the
depression and wars shocks of the first part of the century and could not recover
because of the dynamic effects of progressive taxation on capital.
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If you are against progressive taxation to mitigate the extreme of US wealth distribution inequity, does the preceding argument influence you? The fact that so little research has been done in the past seems to me to be a sign that neither "side" wanted to risk seeing the results.
We have the taxation and government policies of the long list of "low gini" OD countries to compare to our own, so I think we know that the policies can move gini lower, or even higher....
Quote:
http://www.washingtonpost.com/wp-dyn...093000495.html
Chinese Officials Vow to Spread Growth Benefits
Decision Reflects Awareness That Inequalities Could Become Politically Troublesome
By Edward Cody
Washington Post Staff Writer
Friday, September 30, 2005; 10:48 AM
BEIJING, Sept. 30 -- The ruling Communist Party vowed Friday to spread the benefits of economic growth more fairly among all levels of Chinese society, seeking particularly to close the yawning income gap between farmers and city dwellers.
The pledge, issued by the Politburo, the country's top policymaking body, was seen in part as a response to growing unrest, especially in small towns and villages, by peasants who feel they have been left out of the economic boom that has transformed China over the last two decades....
....Hu and his premier, Wen Jiabao, have strongly emphasized the need for more equitable wealth distribution since taking over the Chinese leadership nearly three years ago. Nevertheless, the gap between rich and poor has continued to widen as market reforms create money-making opportunities for private businesses and allied government officials, while often leaving peasants in the lurch.
The Politburo's call for more determination to attack the problem <h3>reflected growing awareness at senior levels of the party that widespread dissatisfaction over the glaring inequalities has become a potentially troublesome political issue....</h3>
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China is on the same "block" in our gini neighborhood. How can China's wealth distribution, be called "glaring inequalities", and ours, with such a similar gini number, not even a widely discussed "problem"?
<h3>The U.S. gini "neighborhood":</h3>
................Gini
Ecuador 42
note: data are for urban households (2003)
Burundi ........ 42.4 (1998)
Iran ........ 43 (1998)
Uganda ........ 43 (1999)
Nicaragua ...... 43.1 (2001)
Turkey ........ 43.6 (2003)
Nigeria ........ 43.7 (2003)
Kenya ......... 44.5 (1997)
Philippines .....44.5 (2003)
Cameroon ........44.6 (2001)
Uruguay ........ 44.6 (2000)
Cote d'Ivoire ...44.6 (2002)
<h3>United States ...45 (2004)</h3>
Jamaica ........ 45.5 (2004)
Rwanda ........ 46.8 (2000)
Malaysia ........46.1 (2002)
Mexico ........ 46.1 (2004)
<h3>China ........ 46.9 (2004)</h3>
Nepal .......... 47.2 (2004)
Mozambique ......47.3 (2002)
Madagascar ......47.5 (2001)
Venezuela .......49.1 (1998)
Argentina .......48.3 (June 2006)
Costa Rica.......49.8 (2003)
Sri Lanka .......50 (FY03/04)
Niger ...........50.5 (1995)
Papua New Guinea 50.9 (1996)
Thailand ........51.1 (2002)
Dominican Republic 51.6 (2004)
Peru ............52 (2003)
Zambia ........ 52.6 (1998)
Hong Kong........52.3 (2001)
El Salvador......52.4 (2002)
Honduras ........53.8 (2003)
Colombia ....... 53.8 (2005)
Chile .......... 54.9 (2003)
Panama ........ 56.1 (2003)
Brazil ......... 56.7 (2005)
Zimbabwe ........56.8 (2003)
Paraguay ........58.4 (2003)
South Africa ....59.3 (1995)
Guatemala 59.9 (2005)
Bolivia ........ 60.1 (2002)
Central African Republic 61.3 (1993)
Sierra Leone ....62.9 (1989)
Botswana........ 63 (1993)
Lesotho 63.2 (1995)
Namibia .........70.7 (2003)
This is what a conservative from a conservative institution wrote:
Quote:
http://www.hoover.org/publications/p...w/2913481.html
The Roots of Democracy
February and March, 2006
By Carles Boix
Equality, inequality, and the choice of political institutions
.......Last but not least, there are still no good explanations for how economic development boosts the chances of democracy. In short, we need to push further our inquiry about the roots of democracy.
Realists are right in claiming that democratic life is possible only when certain, mostly material conditions are in place. But, in acting like the drunkard that searches for his lost keys onlyunder the lamppost — that is, by looking at the easy-to-measure variable of income — they have missed the true nature of those conditions. It is, rather, excessive economic inequality, particularly in agrarian countries and in nations rich in oil and other minerals, that exacerbates the extent of social and political conflict to the point of making democracy impossible. In an unequal society, the majority resents its diminished status. It harbors the expectation of employing elections to drastically overturn its condition. In turn, the wealthy minority fears the outcome that may follow from free elections and the assertion of majority rule. As a result, it resorts to authoritarian institutions to guarantee its social and economic advantage. By contrast, in societies endowed with some relative social and economic equality, inhabitants are willing to accept the inherently uncertain results of free elections — that is, they are willing to agree to be temporarily reduced to the status of minority and to be governed by the party they oppose.
<h3>The democratic game</h3>
But once the electoral campaign is over and the winning candidates have assumed the offices or seats under dispute, losers must give up all their claims to power. They must simply wait for new elections (to be held at some point in the future) to have any chance to attain power. In the meantime, they have to accept the decisions and comply with the policies of their electoral adversaries.
The electoral process carries no guarantees, in itself, that any of those politicians, who in most instances opposed each other rather ferociously during the campaign, will respect the terms and continuity of the democratic procedure. The loser, who is now governed by the winner, may abide by the election, accept the defeat. and wait until the next electoral contest takes place. But she may be inclined to denounce the result, mobilize her supporters, appeal to courts and international observers, and perhaps even stage a coup to grab by nonelectoral means the office she lost at the ballot box. In turn, the winner may have an incentive to use his position to shift public resources to fatten his campaign chest and boost his electoral chances, to twist the rules that govern elections and, last but not least, to delay or cancel any future electoral contests.
Hence, a stable or successful democracy — that is, the uninterrupted use of a free and fair voting mechanism to make political decisions and select public officials — is possible only if both the winner and the loser (or, more generally, the majority and the minority) comply with the outcomes of the periodic elections they have set up to govern themselves. The minority, which is now at the mercy of the majority, must accept its defeat. And the majority, which now controls the levers of the state, must resist the temptation of permanently shutting out the losers from power. In short, liberal institutions exist only when all parties consent to the possibility that in the future they may have to exchange their roles in the political theater, with today’s winners becoming tomorrow’s losers and the current losers turning into the future winners.
Equality of conditions
When will voters and politicians abide by the rules of the democratic game? Think again of elections as a game of cards. If too much is at stake — that is, if bets are too large — the incentives to cheat become irresistible. Similarly, the participants in elections will assent only to the rules of the democratic game if the effects of the electoral outcome do not fall on any of them too heavily. <h3>The losers will submit to the electoral result if what they forsake at the moment of defeat is not too excessive, that is, if it does not threaten their living standards or political survival. Likewise, the winners will not exploit their preeminence to redraw the electoral mechanisms (to diminish the uncertainty of future elections) only if the value of the offices they hold and the political decisions they make is not too large.
Generally speaking, democracy will be possible only if both winners and losers — that is, if all voters and their representatives — live under some relative equality of conditions. When voters do not differ excessively in wealth among themselves, not much is up for grabs in elections. Democracy is then a quiet business, feared by few and welcomed by most. By contrast, if social and economic inequality is rampant — that is, if a few control most wealth — the majority will look forward to an election as an event whose outcome will enable them to redistribute heavily to themselves. Facing such strong pressure for redistribution, the wealthy will prefer an authoritarian regime</h3> that would exclude the majority of the population and hence block the introduction of high, quasi-confiscatory taxes.
The insight that equality of conditions is a precondition for democracy has a long and often forgotten tradition in the study of politics. It was apparent to most classical political thinkers that democracy could not survive without some equality among its citizens. Aristotle, who spent a substantial amount of time collecting all the constitutions of the Greek cities, concluded that to be successful, a city “ought to be composed, as far as possible, of equals and similars.” By contrast, he noticed, a state could not be well-governed where there were only very rich and very poor people because the former “could only rule despotically” and the latter “know not how to command and must be ruled like slaves.” They would simply lead “to a city, not of free persons but of slaves and masters, the ones consumed by envy, the others by contempt.”2 Two thousand years later Machiavelli would observe in his Discourses that a republic — that is, a regime where citizens could govern themselves — could only be constituted “where there exists, or can be brought into being, notable equality; and a regime of the opposite type, i.e. a principality, where there is notable inequality. Otherwise what is done will lack proportion and will be of but short duration.”3
More contemporary empirical evidence will be brought to bear later in a separate section. But a quick look at the history of the past two centuries shows that equality loomed large in the choice of political institutions. Big landowners have always opposed democracy, whether in Prussia, Russia, the American South of the nineteenth century, or Central America in the twentieth. By contrast, for democratic institutions to prevail, at least before industrialization, there had to be a radical equality of conditions. The Alpine cantons of Switzerland in the Middle and Modern Ages or the Northeastern states of the United States in the eighteenth and nineteenth centuries are cases in point. ....
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