Inequality - Tilted Forum Project Discussion Community

loquitur · 02-13-2008, 10:57 AM

I'm going to try to start what I hope will be a non-polemical thread here. Let's see if that can work.

The NY Times had an op-ed this week from a couple of economists that argued it's highly misleading to focus on income inequality. Here is a blurb from the op-ed that summarizes the argument:

Quote:

if we compare the incomes of the top and bottom fifths, we see a ratio of 15 to 1. If we turn to consumption, the gap declines to around 4 to 1. A similar narrowing takes place throughout all levels of income distribution. The middle 20 percent of families had incomes more than four times the bottom fifth. Yet their edge in consumption fell to about 2 to 1.

Let’s take the adjustments one step further. Richer households are larger — an average of 3.1 people in the top fifth, compared with 2.5 people in the middle fifth and 1.7 in the bottom fifth. If we look at consumption per person, the difference between the richest and poorest households falls to just 2.1 to 1. The average person in the middle fifth consumes just 29 percent more than someone living in a bottom-fifth household.

To understand why consumption is a better guideline of economic prosperity than income, it helps to consider how our lives have changed. Nearly all American families now have refrigerators, stoves, color TVs, telephones and radios. Air-conditioners, cars, VCRs or DVD players, microwave ovens, washing machines, clothes dryers and cellphones have reached more than 80 percent of households.

I can think of a couple of qualifying observations that would hold true even if the data here are totally reliable (from what I have read, the general gist is reliable, though some of the precise figures can be disputed). Here are the qualifiers:

1. Consumption comparisons are valid only in the short-term. Higher earners will presumably not spend many many times what lower earners will because, at a certain point, there's a limit to what you can spend on yourself. But the excess of the high-earner's earned income over the amount the high earner spends on consumption has to go somewhere, and where it goes is savings and investment. That means over the long term, even if there is not a large disparity in the people's short-run contentment, there is a disparity in wealth accumulation. Wealth provides (so far as I can tell) two things that income doesn't - first, it provides some degree of security that if something happens to adversely affect your earning capacity, you won't starve or lose your home. The other thing is it gives you the ability to direct its disposition - to your kids or to charity or wherever. To that extent, there is a value people get from wealth as a result of higher income that just can't be measured by looking at consumption. So, while I don't necessarily contest the thesis that consumption inequality is more relevant than income inequality, consumption inequality itself has problems as a measure of well-being because there are things it doesn't pick up.

2. Income inequality itself is misleading, primarily because the ways of calculating income are distorted by the tax system. Taxable income tends to be driven by what is reportable, but what is reportable does not align that well with what actually is paid to or for the benefit of the filer. The result is that reported taxable income tends to be much more unequal than actual compensation. So, for instance - just to take a very common item of compensation that isn't reported - a person who makes $30,000 but has $15,000 worth of health insurance paid by her employer does NOT make half what a person who is paid $60,000 and has the same coverage makes. The lower-paid person makes 60%, if there are no other non-wage items involved. But there of course are other non-wage items: for example, employer's social security contribution (which is capped), 401(k) income accumulation and/or matching (also capped), etc etc etc. These items will, on a percentage (not raw dollar) basis, boost low-earners' income much more than high earners'. Once you factor in all the compensation people get that isn't reportable -- which includes, for low earners, things like food stamps or heating subsidies -- the degree of real income inequality correspondingly gets reduced. (I can't remember where I saw the graphs on this, but they're out there.)

Should this matter? It depends how you feel about economic inequality. If you think inequality is in and of itself a bad thing you'll think it's a problem that needs somehow to be fixed. If you think inequality is not necessarily a bad thing so long as it's linked to productive endeavors, you'll take a different view. But whichever school of thought you belong to, certainly it is in everyone's interest to have a handle on what the true scope of the issue is. That's where I think this NY Times article does a service - it gets us to thinking about what really makes people well-off or not.

Comments?

roachboy · 02-13-2008, 11:38 AM

i dont see the logic behind any argument that would replace data on income with data on consumption rates/levels--but i would have no problem with datasets that juxtaposed the two--the difference between the lines you might draw would be a nice image of credit and it's role--and that seems to me one level of what this question turns on, really: what to do and how to think about the pervasive role played by consumer credit in driving expenditures.

there's a second problem:
the relation of these expenditure levels to the problems of structural inequality in the distribution of wealth is different, it seems to me: IF one were to replace data about income with data about consumption levels, it would have the effect of minimizing the appearance of economic inequality. but everyone would know--at least for a while--until they forgot about it--that nothing particular has actually changed about the distribution of wealth except what is now being used to index it.
on this, the question seems to me not to be whether you imagine inequalities in the distribution of wealth to be a problem or not, but rather what statistics are to do, what they measure and why they measure it--and whether it is a good idea to be cavalier about switching indices in order to generate or reinforce ideological biais or for political advantage (think about the reagan redefinition of inflation rates by excluding from them what causes inflation rates to rise...what good has it done, beyond enabling reagan to say he "did something" about inflation)---if you think statistics are an extension of politics, then you'll land in one place on this--if you think that it's a good idea for policy-makers to have something approaching an accurate picture of the socio-economic realities they are supposed to administer/interact with, even if that picture poses problems--then you'd land in another.

==========

as a counter to the edito quoted in the op, here's an editorial from this morning's ny times by robert reich.
make of it what you will in general, but it sure raises problems for the op edito:

http://www.nytimes.com/2008/02/13/opinion/13reich.html

Ustwo · 02-13-2008, 01:10 PM

Its an interesting way to look at it, though I can see it being more of a way for a 'progressive' to justify more government confiscation of someones property. After all if you only consume two times as much you don't need to make 5 times as much, at least in some of their logic.

The real issue as I see it is 'so what?'.

Outside of the handful of mega rich, the lifestyle of the wealthy is not a whole lot different than the middle class which isn't that much different from 'the poor'.

There are people, actors, elite athletes, CEO's who will make more in a year than I will my entire life. So what? Does their wealth hurt me, or anyone else?

As long as people are not unfairly being kept 'down' then it doesn't really matter what someone makes.

When I see people starving in the streets, dying of curable diseases because they are refused treatment due to poverty, when hopelessness is due to the system not allowing hard work to succeed, then let me know.

loquitur · 02-13-2008, 01:18 PM

Well, those two posts just now point to two different views of whether we should care about inequality. My additional question was which kinds of inequality we should care about, and why.

Ustwo · 02-13-2008, 01:38 PM

Quote:

Originally Posted by loquitur

Well, those two posts just now point to two different views of whether we should care about inequality. My additional question was which kinds of inequality we should care about, and why.

Inequality in potential, not inequality in wealth.

When you are unable to become successful due to the system, then you have created a permanent underclass which is obviously not a desirable outcome.

Interestingly while progressives want the fascist take over of the health care system by the government, I'd much rather see money spent on allowing intellectually qualified individuals be granted tuition for public colleges/universities. This is somewhat needed as so many highschools currently do not give you the skills you need to succeed.

Willravel · 02-13-2008, 01:45 PM

Maybe a better way to do this would be to set up different systems of comparison and label them. Some systems clearly do have inequalities in represented data and as such should be recognized as such, but that hardly means that all systems have the same equalities or that even all systems are unequal.

Yes, my solution does require that one learn new things *gasp*, but quite frankly, I believe that if one is to stay adequately informed it takes work.

Edit: I'll add a rudimentary example of what I'm talking about. Once upon a time when Maths were in their infancy, people wanted to understand averages. The problem? There are different ways to calculate averages.

Man 1 firmly believed that the best way was to present the usual average (4 + 4 + 6) ÷ 3 ~ 4.6

Man 2 firmly believed that the middle number was the average. ( 1, 2, 3, 4, 5)

Man 3 absolutely believed the number that is repeated more often than any other is the average (1, 1, 2, 3, 4, 5, 5, 5, 6, 7, 8), and he was also sleeping with man 1's wife, but that's moot.

What was done? Each was given a name—mean, median, and mode—and maths smiled.

loquitur · 02-13-2008, 01:56 PM

One economics blogger whom I read frequently had the following question: why do we care about economic inequality but we don't care about inequality of things like sports ability, physical attractiveness, or height. Each of those can seriously affect a person's sense of self and well-being. For instance, I was always the kid picked last when teams got chosen up. It wasn't fun at all. Jocks tend to attract the most attention. Why isn't that something people get incensed about? Basic athletic ability isn't earned, it's something you're born with. Isn't this an unfair inequality? Why do we tolerate it? Or physical appearance - that one really is unearned.

roachboy · 02-13-2008, 02:10 PM

uh...because economic inequality has fuck all to do with arbitrary physical attributes like height.

it is a political question that follows from the way in which capitalism works.

this is not rocket science.
it is not a surprise.
it is not news.

and you can't collapse inequality in the capitalist context into some endless history of inequality if you want to say anything meaningful because the basis for it is fundamentally different--you know, generalized wage relations as over against ownership of the means of production concentrated in the hands of a particular social class (complicated by the stock and again by the transformations in stock ownership of the past 30 years in the states--but the point still basically holds)

it's a bad analogy.

Ustwo · 02-13-2008, 02:16 PM

Quote:

Originally Posted by roachboy

uh...because economic inequality has fuck all to do with arbitrary physical attributes like height.

it's a bad analogy.

O'rly?

http://www.cnn.com/2007/US/Careers/0...ple/index.html

Quote:

...
To add insult to injury, height has not only been linked to larger paychecks and greater self-confidence, but also to higher intelligence.*
Sweet Sixteen

For decades, social scientists have studied what is referred to as the "height premium" -- the increased earnings that, on average, taller people receive.

A 2001 study by Nicola Persico, Andrew Postlewaite and Dan Silverman of the University of Pennsylvania, found that it's the height a person had as a teenager that matters when it comes to bringing home the bacon as an adult.

"Two adults of the same age and height who were different heights at age 16 are treated differently on the labor market," Persico, Postlewaite and Silverman concluded. "The person who was taller as a teen earns more."

"Those who were relatively short when young," they continued, "were less likely to participate in social activities associated with the accumulation of productive skills and attributes, and report lower self-esteem." ...

loquitur · 02-13-2008, 02:17 PM

the reason I'm raising these, roachboy, is because I want to try to get people to isolate what it is about inequality that bothers them (IF it bothers them). I thought that pointing to different kinds of unequal endowments would get people to articulate what is similar or different among the various kinds. Your post just restated a conclusion without analyzing.

host · 02-14-2008, 03:51 AM

Quote:

Originally Posted by Ustwo

Its an interesting way to look at it, though I can see it being more of a way for a 'progressive' to justify more government confiscation of someones property. After all if you only consume two times as much you don't need to make 5 times as much, at least in some of their logic.

The real issue as I see it is 'so what?'.

Outside of the handful of mega rich, the lifestyle of the wealthy is not a whole lot different than the middle class which isn't that much different from 'the poor'.

There are people, actors, elite athletes, CEO's who will make more in a year than I will my entire life. So what? Does their wealth hurt me, or anyone else?

As long as people are not unfairly being kept 'down' then it doesn't really matter what someone makes.

When I see people starving in the streets, dying of curable diseases because they are refused treatment due to poverty, when hopelessness is due to the system not allowing hard work to succeed, then let me know.

Quote:

Originally Posted by loquitur

Well, those two posts just now point to two different views of whether we should care about inequality. My additional question was which kinds of inequality we should care about, and why.

Quote:

Originally Posted by Ustwo

Inequality in potential, not inequality in wealth.

When you are unable to become successful due to the system, then you have created a permanent underclass which is obviously not a desirable outcome.

Interestingly while progressives want the fascist take over of the health care system by the government, I'd much rather see money spent on allowing intellectually qualified individuals be granted tuition for public colleges/universities. This is somewhat needed as so many highschools currently do not give you the skills you need to succeed.

Quote:

Originally Posted by loquitur

One economics blogger whom I read frequently had the following question: why do we care about economic inequality but we don't care about inequality of things like sports ability, physical attractiveness, or height. Each of those can seriously affect a person's sense of self and well-being. For instance, I was always the kid picked last when teams got chosen up. It wasn't fun at all. Jocks tend to attract the most attention. Why isn't that something people get incensed about? Basic athletic ability isn't earned, it's something you're born with. Isn't this an unfair inequality? Why do we tolerate it? Or physical appearance - that one really is unearned.

Quote:

Originally Posted by loquitur

the reason I'm raising these, roachboy, is because I want to try to get people to isolate what it is about inequality that bothers them (IF it bothers them). I thought that pointing to different kinds of unequal endowments would get people to articulate what is similar or different among the various kinds. Your post just restated a conclusion without analyzing.

Questions for loquitur and Ustwo:
The unsuccessful 1936 Republican party presidential candidate, Alf Landon, and the next successful Republican candidate, President Dwight Eisehower. made remarkably similar statements, 15 years apart, related to progressive measures taken by government in the mid 1930's in response to the collapse of US economic activity:

Quote:

http://www.time.com/time/magazine/ar...760000,00.html
Monday, Jul. 18, 1938

Two nights before Franklin Roosevelt's eloquent appearance in the Midwest last week (see p. 7), the man whom he snowed under at the polls in 1936. Alf Landon of Kansas, stepped to a microphone in Council Bluffs, Iowa, to do what he could as a challenger. "I know I can't compete with Mr. Roosevelt as a radio artist," said Mr. Landon, but he tried:

"During the last election there were seventeen million people who voted against the present Administration. I think if you would take a poll of these seventeen million people you would find an overwhelming majority of them believe in collective bargaining . . . social security . . . unemployment insurance. They believe in relief—relief to the needy and unemployed, but not the financing of a vast political machine under the false label of relief. They believe in a better distribution of wealth created, in raising the standard of living, and a great many other social reforms. . . .

"America has decided these issues. Regardless of what party comes into power, they will have to be carried forward be cause the majority of our people want them. But they want them to work. . . .

"As long as we are resigned to crooked ness and waste in government, we will continue to have a wasteful government. As long as we depend upon intellectual trick ery instead of truth, we will continue to have crowd psychology and propaganda, instead of well-informed public opinion.

". . . Unless there is a change in the President's methods and policies we will be right back in another depression as soon as the Government spending splurge is over."....

Quote:

http://www.eisenhowermemorial.org/pr...ments/1147.cfm
The Papers of Dwight David Eisenhower, Volume XV - The Presidency: The Middle Way
Document #1147; November 8, 1954
To Edgar Newton Eisenhower

....Now it is true that I believe this country is following a dangerous trend when it permits too great a degree of centralization of governmental functions. I oppose this--in some instances the fight is a rather desperate one. But to attain any success it is quite clear that the Federal government cannot avoid or escape responsibilities which the mass of the people firmly believe should be undertaken by it. The political processes of our country are such that if a rule of reason is not applied in this effort, we will lose everything--even to a possible and drastic change in the Constitution. This is what I mean by my constant insistence upon "moderation" in government. <H3>Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history.</h3> There is a tiny splinter group, of course, that believes you can do these things. Among them are H. L. Hunt (you possibly know his background), a few other Texas oil millionaires, and an occasional politician or business man from other areas.5 Their number is negligible and they are stupid.

To say, therefore, that in some instances the policies of this Administration have not been radically changed from those of the last is perfectly true.6 Both Administrations levied taxes, both maintained military establishments, customs officials, and so on.

But in all governmental fields of action a combination of purpose, procedure and objectives must be considered if you are to get a true evaluation of the relative merits.....

<h3>It isn't well known, anymore, but in the mid 1930's, in response to the inequity in wealth and power distribution in the US, over the strenuous objection of business and wealthy interests, a temporary committee was formed to investigate power and wealth distribution in the US, with an emphasis on the effects of patents and monopolies. The committee, "TNEC" was only allowed to investigate for less than three years, and it issuded a number of reports, BUT, EVEN AFTER MORE THAN 66 YEARS TIME, MOST OF IT'S INVESTIGATIVE RECORDS ARE STILL SEALED...</h3>

Quote:

http://www.amazon.com/exec/obidos/se...ic%20Committee
Books › "Temporary National Economic Committee"

Showing 1 - 12 of 93 Results

http://www.archives.gov/research/gui...roups/144.html
<h3>Records of the Temporary National Economic Committee [TNEC]</h3>

(Record Group 144)
1938-41
645 cu. ft.

Overview of Records Locations

Table of Contents
144.1 ADMINISTRATIVE HISTORY

144.2 RECORDS OF THE COMMITTEE 1938-41 967 lin. ft.

144.1 ADMINISTRATIVE HISTORY

Established: As a joint Congressional-Executive branch committee, composed of members of both houses of Congress and representatives of several Executive departments and commissions, by joint resolution of Congress, June 16, 1938 (52 Stat. 705). Functions: Studied monopoly and concentration of economic power, and made recommendations for legislation.

Abolished: April 3, 1941, by expiration of extension granted by joint resolution, December 16, 1940 (54 Stat. 1225). Liquidation deadline of December 31, 1941, set by Additional Urgent Deficiency Appropriation Act of 1941, May 24, 1941 (55 Stat. 200).

....Specific Restrictions: <h3>As specified by the SEC, no one, except government officials for official purposes, may have access to records created and filed by the SEC on behalf of the TNEC</h3>, except for the following: certain records relating to the insurance study, consisting of replies to formal questionnaires....

Quote:

http://www.time.com/time/magazine/ar...759590,00.html
Anti-Monopoly
Monday, May. 09, 1938

Last year Harold L. Ickes and Robert Houghwout Jackson handed U. S. Business the Administration's Christmas greetings in the form of a pair of diatribes about "economic oligarchy" and "the 60 families." Implication was that they would be followed by a similarly vehement message from the President to Congress, suggesting revision of U. S. anti-trust laws. Anxiously awaited by Business ever since, the business monopoly message from the nation's greatest governmental monopolist finally appeared last week. A detailed request for Congressional investigation of the whole subject of monopoly as a preliminary to future legislation to curtail it, it was chiefly noteworthy for a tone as mild as Messrs. Ickes & Jackson had been bitter.

Simple Truths. Read to Congress the day after Governor La Follette's launching of a new party in Madison, Wis. (see p. 12), the President's message opened with some strikingly similar themes:

"Unhappy events abroad have retaught us two simple truths about the liberty of a democratic people. The first truth is that the <h3>liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic State itself. That, in its essence, is fascism—ownership of government by an individual, by a group or by any other controlling private power.

"The second truth is that the liberty of a democracy is not safe if its business system does not provide employment and produce and distribute goods in such a way as to sustain an acceptable standard of living. Both lessons hit home. Among us today a concentration of private power without equal in history is growing."</h3>

Statistics. To prove his point that current concentration of economic power is unexampled, the President quoted familiar statistics from reports to the Bureau of Internal Revenue: 1) .1% of U. S. corporations own 52% of all corporate assets, get 50% of all corporate income, less than 5% of U. S. corporations own 87% of the assets and less than 4% of manufacturing corporations get 84% of their net profits; 2) even in 1929 .3% of the population got 78% of the dividends and 3) in 1936, 33% of all inheritances went to 4% of all heirs. Taking this as premise No. 1, the President proposed as premise No. 2 that the concentration was due to monopolistic trends in U. S. business. His conclusion was that "a thorough study of the concentration of economic power in American industry and the effect of that concentration upon the decline of competition" should be undertaken by the Federal Trade Commission, Department of Justice and Securities & Exchange Commission, for whom he recommended appropriating $500,000. In addition, the President requested $200,000 more to enable the Department of Justice—whose Assistant Attorney General Thurman Arnold (The Folklore of Capitalism) was last week telling a New York audience about his plan to publicize antimonopoly prosecutions—to enforce existing anti-trust laws.....

Quote:

http://www.time.com/time/magazine/ar...764913,00.html
Thirteen Families
Monday, Oct. 28, 1940

....He wrote an erudite bombshell of questionable accuracy titled America's 60 Families, watched his subjects squirm while Secretary Ickes and then Assistant Attorney General Jackson quoted it with gusto. Within less than a year the families were sprawled under more powerful microscopes as the Temporary National Economic Committee made a study of corporate practices and controls.

Last week the Securities and Exchange Commission published its report to null a 121-page study of "The Distribution of Ownership in the 200 Largest Non-Financial* Corporations." Based on 1937 figures, it whittled the Lundberg roster to 13 families, was considerably less personal than his census of Du Pont bathrooms, considerably more dogged in tracking down actual shareholdings (Lundberg had estimated fortunes by 1924 tax returns). <h3>It found:

» Of an estimated 8,500,000 U. S. stockholders, less than 75,000 (.06% of the population) own fully one-half of all corporate stock held by individuals. The majority of the voting power in the average large corporation is in the hands of not much over 1% of the shareholders.</h3> But some of the biggest and best-known corporations are exceptions (i.e., widely held, without visible centralized control): A. T. & T., Anaconda, Bethlehem Steel, Eastman Kodak, General Electric, Goodyear, R. C. A., U. S. Steel, Pennsylvania Railroad, etc.....

....» The 13 most potent family groups' holdings were worth $2,700,000,000, comprised over 8% of the stock of the 200 corporations: Fords, $624,975,000; Du Fonts, $573,690,000; Rockefellers, $396,583,000; Mellons, $390,943,000; McCormicks (International Harvester), $111,102,000; Hartfords (A. & P.), $105,702,000; Harknesses (Standard Oil), $104,891,000; Dukes (tobacco, power), $89,459,000; Pews (Sun Oil), $75,628,000; Pitcairns (Pittsburgh Plate Glass), $65,576,000; Clarks (Singer), $57,215,000; Reynolds (tobacco), $54,766,000; Kresses (S. H. Kress), $50,044,000.

» Three groups—Du Fonts, Mellons, Rockefellers—have shareholdings valued at nearly $1,400,000,000, control, directly or indirectly, 15 of the 200 corporations....

*Excluded: banks, trust companies, insurance companies, investment houses.

<h3>My questions so far, are, what has changed, besides the reaction to wealth inequity of the 1930's? Can you make a case that it is distributed more equitably in the US today, than it was 70 years ago?</h3> When did the republican POV change? Where did the impetus come from to propose privatization of social security, for example? Isn't SS, with it's $186 billion per year, <a href="http://www.socialsecurity.gov/OACT/ProgData/fyOps.html">current surplus</a>, not "the problem"? Isn't "the problem" actually the tax cuts, and increased defense, intelligence operations, and DHS spending since 2001?

Isn't it fair, since "the people" demanded and paid for the TNEC investigations and reports on the distribution of power and wealth in the US, and the effect of monopolies, that, after nearly 67 years, all of the records gathered by the TNEC committee that do no involve personal, non-financial details, be unsealed and made available for public examination, especially considering that 1940 census data will be released to the public , two years from now?

If inequity in wealth and power in the US is "not a problem", why would anyone argue for continuing to keep sealed, the records of the only in depth, congressional committee investigation, of the "non problem"?

I can think of no better example than the following, to answer Ustwo's question:

Quote:

Originally Posted by Ustwo

...Does their wealth hurt me, or anyone else?....

I think, Ustwo, that the impact is about "opportunity cost" to the rest of, and the flow of power and wealth away from most of us, because opportunity is "preempted" by the "juice" of the connections that the concentration of wealth, attracts. Officials and their power and influence, is bought, siphoned off, and upcoming politicians, are "bred" similar to race horses.

In the 1920s, 30s, and 40s, a group of friends kept a close association, and conducted related business activities. The elder man in the group, ten to fifteen years senior to the others, managed to obtain the franchise, granted by the state government regulators, after the end of prohibition in 1933, to distribute liquor in Arizona, and eventually grew his business to a level that excluded all competition. If you operated a retail or an entertainment establishment in Arizona that sold liquor to the public, you had to buy from United Liquor.

This same elder gentleman of this group, came to deal with the investors and principles who conceived of and built the initial modern casino hotels in Las Vegas. It is documented in a New Mexico state police investigation that the owner of Arizona's United Liquor distributors came to own the Transamerica race-wire, the sports betting, bookmaker's information service that originated with Al Capone's Chicago crime organization, and he was a principle in an <a href="http://209.85.165.104/search?q=cache:7T3uAEHe4yIJ:www.nevadaobserver.com/Reading%2520Room%2520Documents/Kefauver%2520Committee%2520-%2520Testimony%2520of%2520Louis%2520Wiener%2520(1950).htm+%22valley+national+bank%22+flamingo+siegel&hl=en&ct=clnk&cd=4&gl=us">Arizona bank that loaned $2 million to the Mafia</a> principles who built the Flamingo Hotel in Las Vegas in 1947....

Quote:

http://www.nps.gov/history/history/o.../hrs/chap9.htm
Chapter 9
Rio Rico and the Great Arizona Land Rush

...Two years later, Manning sold much of his deeded land to liquor wholesaler Kemper Marley, who was later implicated in the bombing murder of reporter Don Bolles. With the sale went most of the federal and State Trust Land grazing leases as well. The greatest ranch in southern Arizona shrank from 500,000 to 20,000 acres (Hadley 2000)......

Read the rest of the nps.gov history article to see how another mob connected figure and builder of the Flamingo Hotel, Del Webb, benefited from the growth in Phoenix brought in large, part, by the government construction of the US interstate highwy network.

In 1946, two of the younger members of the group of friends described above, a pair of brothers, were employed as managers at United Liquor by Kemper Marley, and were arrested on federal liquor bootlegging violations, accused in testimony by another United Liquor manager, of altering nearly 1400 invoices of case sales of liquor, sold in cash transactions to unknown parties. Owner Marley was not charged, and James Hensley was found guilty and sentenced to 6 months in prison, suspended, while his older brother Eugene was convicted and served a one year prison sentence. Both brothers, along with 50 other United Liquor employees and the firm itslef, were tried on similar charges again in 1953, but were not convicted. Owner Marley was never charged.

The two Hensley brothers, also in 1953, purchased the Ruidoso Downs, New Mexico horse racing track, lying to the racing commission about the participation of a 1/3 owner's stake partner in the purchase, a gambler not approved by the NM racing commission, named Clarence "Teak" Baldwin. James Hensley sold his stake in the track to brother Eugene in 1955, and became the owner of record of the Budweiser beer distributorship in Phoenix, allegedly thorough the aid of United Liquor owner Marley. In 1948, a man named Greenbaum who was a partner in the race-wire with Marley, was murdered in a gangland style "hit". Eugene Hensley entered into a long term food and beverage concession lease at Ruidoso downs with an Emprise Company of Buffalo, NY subsidiary. Eugene served a one year income tax evasion prison sentence in the 195os and was banned from his track by the NM Racing Commission, after he was convicted a second time of tax evasion, but before he served a five year prison sentence for the second offense. Eugene, in the late 1960s and still as principle stock holder of the race track, sold the track to a group financed by the still long term track concession leasee, the Jacob's company, Emprise subsidiary:
http://query.nytimes.com/gst/fullpag...gewanted=print

Quote:

http://www.time.com/time/printout/0,8816,911808,00.html
Monday, Jun. 28, 1976
'They Finally Got Me'

As gangland executions go, it was ordinary enough. A dynamite bomb attached by magnets to the bottom of a car. The driver brutally maimed after the electronic triggering mechanism was set off by remote control. The hit man far from the scene. But the locale was not Chicago's West Side and the victim was not a wayward mobster. He was Investigative Reporter Donald F. Bolles, 47, and his death in Phoenix last week of injuries from the bomb underscored the viciousness and power of organized crime in Arizona in a way nothing he wrote ever could have.

For eleven days and through half a dozen operations, during which both legs and his right arm were amputated, Bolles had fought for his life. His last whispered words−"Mafia ... Emprise ...

They finally got me... John Adamson, find him"−had resulted in the arrest of Adamson. More significantly, they had ensured the first major statewide investigation of the corruption that has enriched home-grown and imported conmen, including Mafiosi, while bilking land buyers of more than $500 million since the mid-1960s.

Gunned Down. Ever since Phoenix's emergence from a parched cow town in the early 1940s to a steamy Southwestern metropolis in the '50s and '60s, criminal elements have flocked to the desert country and flourished. Land fraud has proved the most profitable enterprise, but racketeers have also gained control of restaurants and other fronts for illegal activities.

Besides Bolles, twelve persons associated with some of the land fraud scandals have died over the past six years, all before they could testify. Five died in two separate plane crashes, one drove off a cliff, another succumbed to carbon monoxide poisoning in his automobile. Three suffered fatal heart attacks and another died of cancer. One was gunned down 24 hours before he was to testify in a grand jury investigation.....

....Bolles, an Easterner hired by the Arizona Republic, sensed that organized crime flourished in collusion with public officials. In 1965 he was nominated for a Pulitzer Prize for detailing bribery within the Arizona State Tax and Corporation Commissions. Two years later, he exposed a gigantic land fraud scheme involving Western Growth Capital Corp. Later stories resulted in the prosecution of Ned Warren Sr., a major figure in that corporation and an ex-con. In 1975, Warren escaped prosecution in a land fraud case after the chief prosecution witness was slain.

<h3>Undaunted, Bolles also attacked Emprise Corp., a notorious sports enterprise controlled by Buffalo, N.Y.. interests that had gained control of Arizona horse and dog racing tracks. He became so expert on the intricacies of Emprise operations in Arizona that in 1972 he became a witness before the Select Committee on Crime of the U.S. House of Representatives.</h3>

The presence of such mobsters as Joe Bonnano Sr. and Peter Licavoli in Tucson reinforced Bolles' impression of how hospitable Arizona had become to organized crime. His exposes made big journalistic splashes, but resulted in few indictments and even fewer attempts to curb organized crime. At length Bolles wearied of what he came to regard as windmill tilting and asked to be taken off the crime beat. But he could not stay away. When Adamson, a disreputable greyhound breeder and former tow truck operator, telephoned him three weeks ago with information purporting to link top Arizona Republicans to land fraud schemes, Bolles rushed off to meet him at a Phoenix hotel. While he waited, someone apparently placed the explosive charge in his car, parked in the hotel lot. Adamson failed to appear, and Bolles soon after stepped into his white 1976 four-door Datsun−and the trap that had been laid for him.

Whoever plotted it. the senseless killing seemed certain to boomerang. Arizona Attorney General Bruce Babbitt quickly took charge of the investigation, brushing aside the bumbling Maricopa County prosecutor, Moise Berger. Both houses of the state legislature swiftly approved legislation to break up the Arizona dog racing monopoly, controlled in part by Emprise. A special prosecution fund providing $100,000 to investigate Bolles' murder is assured of speedy approval by the legislature. The Arizona Republic vowed to intensify its crusade against "the slimy hand of the gangster and the pitiless atrocities of the terrorist."

Investigators were inclined to doubt that the Mafia had ordered Bolles' assassination. Said a Department of Justice expert on organized crime: "The gangsters are smart enough to know that getting rid of a reporter only causes more trouble than the reporter could stir up in the first place." Arizona authorities finger home-grown mobsters as more likely to commit such an act. They suggest that, despite his apparent loss of interest, Bolles may have been close to linking some big names to illegal schemes. Phoenix Police Lieutenant Jack Bentley told TIME Correspondent William F. Marmon Jr.: "Bolles had reams of stuff in his files that was very damaging but never printed. We have volumes of information leading to influential people, but people insulated to the nth degree. It is really hard to tell who the enemy is at this point."

Broad Front. According to newsmen Bolles talked to after receiving Adamson's call, Adamson told Bolles that he could link Senator Barry Goldwater and Representative Sam Steiger to land fraud schemes. But there is no credible evidence involving either. Authorities believe that the names were used only as bait to entice Bolles. Of considerable interest to investigators is the role of Neal Roberts, a Phoenix attorney and an associate of both Adamson and Ned Warren, the so-called "Godfather" of Arizona land fraud schemes. Roberts quickly stepped forth with an alibi for Adamson, claiming that the two were together in Roberts' office moments before the explosion that maimed Bolles. Roberts' attorney, John Flynn, concedes that "the circumstances could cause one to wonder what the hell is going on."

At week's end Arizona officialdom at last seemed determined to move on a broad front. More than 900 people, including the Governor, the attorney general, 80 legislators and top business and community leaders signaled their outrage by crowding into the Church of the Beatitudes of the United Church of Christ for Bolles' funeral services. Observed one high-ranking Arizona official: "You cannot have the sort of systematic fraud and swindling that we have without the complicity of some top business and political figures."

That is the message Don Bolles had been trying to convey for several years.

Quote:

Kemper Marley Sr. Is Dead at 83; Name Arose in '76 Slaying Inquiry ...LEAD: Kemper Marley Sr., a millionaire Arizona rancher and liquor distributor ... In 1976 Don Bolles, an investigative reporter for The Arizona Republic who ...
http://query.nytimes.com/gst/fullpag...55C0A966958260

http://search.phoenixnewtimes.com/19...is-maker/print
...THE MAGNATE MEETS HIS MAKER
Continued from page 1
Published: July 4, 1990

A few years back, it was revealed that Marley owned twelve square miles of land near the McDowell Mountains. The land was valued at $112 million and Marley paid only $660 a year in taxes on it. At the time of his death, Maricopa County was still fighting to collect millions from Marley in back taxes.

Marley fought to get the Bolles killing behind him....

....The funeral cortege moved away. Goldwater, all alone, stopped to talk with some people on the sidewalk. Then he limped to his car.

It was over.
<h3>I remembered something Marley's friend Doherty said in his eulogy.
"Kemper loved his country. He supported candidates with his time and money. He wanted to preserve the free-enterprise system."

Don't they all? </h3>

Quote:

http://www.azcentral.com/business/ar...lgado1230.html
CEO leads company in tradition of giving back
Beer distributor's CEO continues long tradition
Cathryn Creno
The Arizona Republic
Dec. 30, 2007 07:52 PM

...Cindy McCain became Hensley's chairwoman in 2000.

In 1955, James Hensley opened his business with 15 workers in a small brick building downtown. The company sold 73,000 cases of Anheuser-Busch beer and held a 6 percent market share during its first year of business. Today, it counts more than 650 employees, sells nearly 23 million cases annually and racks up annual sales of about $340 million with about a 60 percent market share....

Quote:

http://query.nytimes.com/gst/fullpag...pagewanted=all
THE 2000 CAMPAIGN: THE ARIZONA TIES; A Beer Baron and a Powerful Publisher Put McCain on a Political Path

By DOUGLAS FRANTZ
Published: February 21, 2000
When Senator John McCain of Arizona describes the people who shaped his life, he invariably dwells on the influence of his father and grandfather, both distinguished Navy admirals and larger-than-life figures. Less widely known are the roles played by two other powerful men in launching his political career.

Mr. McCain's father-in-law, a wealthy beer baron named James W. Hensley, gave Mr. McCain his first job out of the Navy and helped bankroll his crucial first race for Congress in 1982, enabling Mr. McCain, a political newcomer, to outspend and defeat better-known opponents.

Even today, Mr. McCain's position as one of the wealthiest members of Congress is derived from his wife's share of her family's Anheuser-Busch beer distributorship here and extensive real estate investments through the company, holdings worth more than $10 million.

In his rise to political influence, Mr. McCain, who had no ties to Arizona until he married Cindy Hensley and moved here in 1981, also won the critical blessing of the city's business establishment through his close friendship with another of the state's power brokers, Darrow Tully, the publisher then of the state's dominant newspaper, The Arizona Republic. ''Duke'' Tully led an ad hoc group of business executives and self-appointed political kingmakers known as the Phoenix 40, whose backing helped Mr. McCain in that first Congressional race and assured his Senate victory four years later.....

http://www.phoenixnewtimes.com/1993-...to-reruns/full
THE BOLLES TRIAL GOES INTO RERUNS
By Tom Fitzpatrick
Published: February 10, 1993

...Marley was the most powerful man in Arizona for a half-century. He was tough, generous, a contributor to charitable causes, and a tax dodger. At his death, he left millions to the University of Arizona so a building for the school of agriculture could be named in his honor. To their eternal disgrace, UofA officials accepted the money. <h3>If you did Marley a favor, he was likely to turn around and make you a millionaire. If, in the words of Don Corleone, you "did him a disservice," you might get blown to bits. Marley did a favor for Senator John McCain's father-in-law, Jim Hensley, back in 1948. Hensley had done him a great service.

Hensley took a fall in a liquor-violation case for Marley which resulted in a one-year jail term. When Hensley was ready to return to work, Marley gave him the Budweiser distributorship in Phoenix. He is now one of the richest men in the state.</h3>

Hensley had a pretty good lawyer in that case, too. His name was William Rehnquist, and he is now Chief Justice of the United States Supreme Court.

The roots of the Bolles case go deeper than anyone wants to remember.
I went down to Tucson to see John Harvey Adamson sentenced to death for Bolles' murder.

The jury stayed out for a long time. No one could understand why. It seemed such a clear-cut case.

Later, one of the jurors had an astonishing explanation.
"Only one juror held out for an acquittal," he said. "He somehow got it into his head that Don Bolles had tried to frame Adamson for the murder in a move that reached beyond the grave."
"What do you mean?" I asked.
"Do you remember that Bolles' last words at the bombing were that it was the work of three factions, 'Mafia, Emprise and John Harvey Adamson'?"
This single juror somehow got it into his head that Bolles had mentioned Adamson's name only to get revenge upon him.......

http://www.phoenixnewtimes.com/2000-...regulator/full
See Ya Later, Regulator
By
Published: February 17, 2000

Arizona Department of Liquor Licenses and Control could charitably be described as lax when it comes to enforcing state liquor laws. Despite repeated violations of state laws -- particularly selling beer to unlicensed businesses -- the department has levied only one fine against Hensley & Company in the past 30 years....

...1988

March 12 -- Hensley & Company applied for a new liquor license related to the change in a business location. On the sworn and notarized statement, James Hensley fails to disclose 1949 federal criminal conviction for falsifying liquor records....

Well, you get the idea....or not. My last and most important question for you guys is why does your concern seem to be for the exact opposite of what you truly should be concerned about?:

Quote:

http://www.phoenixnewtimes.com/1992-...-war-hero/full
FOR SALE: ONE WAR HERO
By Tom Fitzpatrick
Published: October 28, 1992

....Moving to Arizona was a financial bonanza for you, too. It made it possible for you to marry again. This time you married an heiress. Your new wife's father was Jim Hensley, who owned a beer-distributing company that had a monopoly on peddling Budweiser.

This single act of matrimony transformed you overnight into one of the many millionaire members of Congress.

It changed you forever. <h2>Millionaires think differently about money than people mired in middle incomes. Millionaires think about preserving their advantage for themselves and their class. You suddenly became concerned about whether poor people had a work ethic. You worried if they were willing to pull themselves up by their own bootstraps.</h2> You're John McCain, who wonders why men carrying signs saying they will work for food aren't energetic enough to marry a beer baron's daughter.....

Why is it that you are so concerned, especially you, Ustwo, about the "unwashed masses", lazy louts who want to use "government", to take "your money"? Why do you think that they are the motherfuckers, when the REAL motherfuckers are the men who use whatever it takes to gain a monopoly on the power and wealth in the country? The fruits of the organized crime enterprise originated by Kemper Marley has financed and influenced the placement of John McCain, literally at the front door of the white house, but you have little reaction, and no concern, at all.

For both of you, have you ever considered, what if I am right? What if roachboy is right? What if, all of your lives, you have been concerned about the exact oppostite political activities and principles than those that are actually "the problem"?

loquitur · 02-16-2008, 06:42 PM

host, please read the OP and stick with what the topic of discussion is here. You can start your own thread if you want to lecture people on topics you want to discuss.

The question was, what kinds of inequality matter and why. If you have something to say about it, do. Otherwise, please don't clutter up the thread.

mixedmedia · 02-16-2008, 06:57 PM

I think, in order to really assess the impact of 'comsumption,' there needs to be an allowance for the amount of 'consumption' that is done by the wealthy for them in the form of employment 'perks' and 'benefits' that the poor do not have privy to. This is not an unsubstantial number.

host · 02-16-2008, 07:16 PM

Quote:

Originally Posted by loquitur

host, please read the OP and stick with what the topic of discussion is here. You can start your own thread if you want to lecture people on topics you want to discuss.

The question was, what kinds of inequality matter and why. If you have something to say about it, do. Otherwise, please don't clutter up the thread.

No reaction to any of the material that I posted, ehhhh loquitur? You have the gall to post an obscenity as the crux of your OP, bullshit by Cox and Alm, passed off as an "article", and then descrube my response as clutter?

70 percent ownership of the entire wealth of the US by just ten percent of the population, is obscene, loquitur, and being the messenger of the incessant, well financed effort to dress it up, put lipstick on it in attempts to make it REASONABLE, is beneath you loquitur, beneath your intellect and your education, but here you are!

Cox and Alm are stooges, they are long exposed as such:

Quote:

http://query.nytimes.com/gst/fullpag...pagewanted=all
Economic Scene;Good news for the down and out, or are the data misleading?
By PETER PASSELL
WHAT'S all this fuss about income inequality? Sure, the richer are richer and the poor are eating Doritos. But not to worry, says W. Michael Cox and Richard Alm, researchers at the Federal Reserve Bank of Dallas: Most Americans struggling to make ends meet are on the fast track to affluence.

They found that just 5 percent of a sample of Americans in the bottom fifth of the income distribution in 1975 were still there 16 years later. Meanwhile, 29 percent of them had managed to grab the brass ring, ending up in the top fifth. And "between opportunity and equality," they remind, "it's opportunity that matters most."

The Cox-Alm study, published in the Dallas Federal Reserve's 1995 annual report, is making big waves among the movers and shakers of the political right. Indeed, after a ringing endorsement from the editorial page of The Wall Street Journal, it has become required reading for conservatives impatient with the current hand-wringing over the alleged plight of the young and immobile.

But a close look at the new research is not confidence-building. Indeed, even a casual look suggests that something -- actually, many things -- are amiss. "Cox and Alm ask the wrong question and give a misleading answer to the question they ask," argues Peter Gottschalk, an economist at Boston College and co-author of "America Unequal" (Russell Sage Foundation).

Standard measures of income distribution amount to snapshots at a moment in time. The large and growing variations between those at the top and bottom that have been reported by the Census are, of course, cause for disquiet. But liberals and conservatives generally agree that mobility matters, too. And without exception, studies that track the fortunes of individuals or families for many years suggest that lifetime income is distributed far more equally than income in any single year.

The Cox-Alm study is in this tradition. It follows 3,725 individuals ages 16 and over who remained part of the University of Michigan's Panel Survey on Income Dynamics for a 16-year period. And their conclusions are nothing short of remarkable. Of those in the bottom fifth in 1975, 95 percent were earning enough money in 1991 to have jumped in the rankings. Poverty in the 1975 snapshot was apparently no impediment to future economic success. The average income of individuals in the bottom fifth rose by $25,322, even after adjustment for inflation.

Mr. Gottschalk, however, notes that the Dallas researchers use unconventional means to reach these astonishing ends. For one thing, they measure incomes actually earned by individuals, rather than assigning individuals some prorated share of family income. As a result, the average earnings of the bottom fifth in 1975 was just $1,153 -- far less than anyone could actually live on.

Who, then, were these people? Probably not the poorest individuals, but the ones who worked only briefly in 1975. Mr. Gottschalk guesses most of them were part-time workers with marginal links to the formal labor force: students with after-school jobs, housewives who worked at the post office in the Christmas rush, and so forth.

Sixteen years later their average incomes had risen a fantastic 23-fold, to $26,475. To Mr. Gottschalk, this suggests that virtually all the former high school and college students in the sample had full-time jobs in 1991, as did most of the mothers whose children had grown up. "I'd be surprised if my teen-ager, who now earns pocket money delivering newspapers, doesn't do equally well," he allowed.

Mr. Gottschalk says, too, that by tracking individuals over time the Cox-Alm study mingles the impact of real economic mobility with income gains linked to accumulating work experience. It should hardly be surprising that 35-year-old carpenters make more than they did when they were 19-year-old carpenters....

Actually read what is contained in my last post, and you'll have the opportunity to observe that nothing changes, even in the fullness of time. The same few (in numbers) elite, still control at least as much as they did in 1938, and they flood the media with bogus "studies" to persuade you to think otherwise. You want to believe. I want to react reasonably to the fact that the top ten percent own 70 percent of everything....that is the gulf between us, and it is damn hard to be cordial in the face of such a divide.

The "certainty" of authors Cox and Alm in your OP article, strikes me as ridiculous, knowing what I know, and here is some of it, for you to consider:

Quote:

http://woodrow.mpls.frb.fed.us/pubs/...1/standard.cfm

....Some economists prefer to look at consumption because it is less volatile than income on an annual basis for most households. People smooth their consumption based on long-term income expectations. Such a phenomenon is readily apparent among those who lose a job. While their income might plummet, consumption tends to fall much less dramatically. Such households tend to either dip into savings or take on additional debt with the expectation that higher income will return in due time.

All this is not to say that consumption wins the best-measuring-stick debate hands down, even among advocates. Sullivan, for example, acknowledged “some important practical concerns with switching to consumption,” including the fact that consumption surveys are much smaller in scale than income surveys, making it difficult to analyze local patterns because of sampling problems.

The consumption model has other blind spots. For example, it can only measure total costs; it has no ability to distinguish the quality of purchases or the utility of different types of purchases to a household. For example, a 2005 working paper by Thomas Deleire of Michigan State and Helen Levy of the University of Michigan found that higher expenditures among single-mother households during the 1990s “can be explained by a shift from food at home to food away from home.” While that is positive in some senses—less work cooking at home and more food “leisure”—an alternative explanation is that more meals were eaten outside the home out of necessity and at higher cost to the household budget, as more single mothers worked, either voluntarily or because of changes to the welfare system in the 1990s. Better off? Hard to say for sure.

Sullivan and others also point out that income poverty has simple longevity on its side. “I think it is well understood that there are flaws in the official measure of poverty,” <h3>Sullivan said. “(But) we have been using the current measure for about 40 years, so we have a nice time series that is generally understood.” A 2005 article in the BLS's Monthly Labor Review noted that most studies of well-being are based on income data “partly because of history and also partly because of habit. Income data are accessible, comparable over time, and of high quality....”</h3>

Quote:

http://www.riskcenter.com/story.php?id=16016
February 12: Commentary – Alm’s For the Poor?

Location: Chicago
Author: Paul Kasriel
Date: Tuesday, February 12, 2008

In the Sunday (February 10) op-ed section of The New York Times, Dallas Fed economists W. Michael Cox and Richard Alm argue that consumption is “a better guideline of economic prosperity than income” (You Aree What You Spend). The authors point out that while the share of national income going to the richest 20 percent of U.S. households rose from 43.6 percent in 1975 to 49.6 percent in 2006 as the share of national income going to the poorest 20 percent of households fell from 4.3 percent to 3.3 percent, the poorest really have not been falling behind so much if consumption is taken into consideration.....

...There is a line item in the Federal Reserve’s Flow-of-Funds data -- “net financial investment” in Table F.100 -- that goes a long way in explaining the “prosperity” to which Cox and Alm refer. Net financial investment is the difference between households’ net acquisition of financial assets and the net increase in their liabilities. In a previous commentary (Gene Epstein's Great American Savings (sic) Myth), I demonstrated that when net financial investment is negative, household total spending must be larger than household income. Chart 2 shows the behavior of household net financial investment as a percent of personal income. Beginning in 1999, household net financial investment has been negative, indicating that total household spending has exceeded household income. In 1975, household net financial investment was positive 8.3 percent of personal income; in 2006, it was negative 5.9 percent of personal income....
<img src="http://www.riskcenter.com/images/editlive/krapoc7k.gif">

...So, yes, the poorest 20 percent of households might be enjoying increased “prosperity” today relative to 1975. But if the households in the aggregate are spending more than their incomes and the richest 20 percent are spending less than their incomes, then it must be that the “bottom” 80 percent are spending considerably more than their incomes. That is, the bottom 80 percent have become “prosperous” by going into debt up to their eyebrows. I sure hope the consumer durables they have purchased with borrowed funds have a long useful life because the bottom 80 percent are likely to find it more difficult spending more than they earn in as much as household credit availability is tightening significantly (see Charts 5 and 6).

Quote:

http://www.people.fas.harvard.edu/~i...final_ineq.pdf
Unresolved Issues
in the Rise of American Inequality
Robert J. Gordon, Northwestern University and NBER
Ian Dew‐Becker, Harvard University
Presented at Brookings Panel on Economic Activity,
Washington, DC
September 7, 2007

....7. Consumption Inequality

While income inequality tells us about the year‐to‐year distribution of economic rewards, to understand the distribution of overall welfare, income may not be the best measure. Many authors have made the point that the life‐cycle/permanent income hypothesis implies that consumption may be a better measure of the distribution of welfare than income. Specifically, if people can insure effectively against transitory income shocks, then as the variance of those transitory shocks rises, measured income inequality will rise, but consumption and welfare inequality will stay fixed.
<h3>We have numerous data sources on income, but there is very little good data on consumption. </h3>The most widely used data set is the BLS’s Consumer Expenditure Survey (CEX), which has annual data beginning in 1980 with a few sporadic surveys before then. The CEX has two surveys; an interview survey and a diary survey. The interview survey follows households through 4 interviews each covering the prior three months of expenditures. It is designed to measure large or routine expenditures, such as

<center>25</center>

mortgages, utilities and car purchases. The diary survey asks households to record all purchases over two two‐week periods. It is designed to measure non‐durable goods and services expenditures. An alternative to the CEX is the Panel Study on Income Dynamics (PSID). The PSID has been following a set of 8,000 households since 1968, and it obtains very detailed measurements of income, employment and health. However, the PSID only measures food consumption. a serious limitation.
The first study to use the CEX to measure the distribution of economic well‐being was Cutler and Katz (1991). Their work covered a variety of topics, including poverty rates, income inequality and consumption inequality. As in much of the other work we have discussed, they used the CPS to measure income. The majority of their analysis computed Gini coefficients. They found that the Gini coefficient for income fell from 0.379 to 0.366 between 1963 and 1980, but then jumped up to 0.397 in 1984. This result is in contrast to that of Kopczuk, Saez and Song (2007), who find that the Gini coefficient for income rose monotonically since 1953 in the SSA data. For consumption, Cutler and Katz find that the Gini coefficient fell from 0.298 to 0.285 between 1960 and 1972, but then rose to 0.314 in 1980 and 0.347 in 1984. Between 1984 and 1988 they found that inequality stayed roughly fixed.

Cutler and Katz (1991) find that income inequality is greater than consumption inequality, which is consistent with the permanent income hypothesis. However, they also find a nearly perfect correspondence between income and consumption inequality, implying that, at least during the 1980’s, increased cross‐sectional income inequality was not driven by increased transitory shocks. Or, if it was, people were not able to insure against the new shocks. Between 1980 and 1984, they found that the Gini coefficients for both income and consumption rose by the exact same amount, .033. The timing of the rise in the Gini coefficient matches similar results on the 90‐10 ratio evident in Figures 3, 4, and 5 discussed above. The only difference that they find between the two series is that the Gini coefficient for income fell by .05 between 1972 and 1980, but for consumption it rose by .29.

Following Cutler and Katz (1991), more research was done during the 1990’s on consumption inequality. Blundell and Preston (1998) provide a good review of the literature looking at the structure of longitudinal income data, citing principally Moffitt and Gottschalk (1995), Buchinsky and Hunt (1996) and Gittleman and Joyce (1996). All three of these papers study permanent and transitory shocks to income and all find increases in the variance of both types of shocks. They also confirm the result that income inequality rose significantly during the 1980’s. Attanasio and Davis (1996) replicated the Cutler and Katz results using the PSID, showing that consumption and wage inequality have followed the same path over time. They also found that these results are confirmed when looking across education and birth year cohorts.

<center>26</center>

A major addition to the literature was Slesnick (2001), who found that during the 1990’s consumption inequality had not risen at all, in sharp contrast to the path of income inequality that we have examined. Krueger and Perri (2003) confirmed this result and provided a model of endogenous credit markets which fit with a view of the 90’s in which transitory shocks to income rose, credit markets became more developed, and consumption was smoothed out over the life cycle.
Much of the literature and the popular press now takes the Slesnick and Krueger‐Perri results as stylized facts.15 However, Attanasio et al. (2006) show that we should not close the book on consumption inequality in the 1990’s just yet. They first provide evidence raising serious questions about the accuracy of the CEX during the 1990’s. They replicate results from Battistin (2003) showing that the CEX has actually measured declining consumption during the 1990’s, and McCarthy et al. (2002) show that the CEX matches the BEA’s data on personal consumption expenditures (PCE) badly in both the level and the trend. Garner et al. (2003) further analyze the causes for the gap between the CEX and PCE data.

The mismatch between the CEX and PCE is worrisome because, as Attanasio et al. note, Banks and Johnson (1998) found that the UK’s Family Expenditure Survey (FES) matches their national accounts data well. So in principal, there is no reason a survey cannot match national accounts data.16 Moreover, Garner et al. (2003) find that the consumption category that has the largest shortfall in comparison with the PCE data is the component most widely used for consumption studies—non‐durables. Services exhibit a similar shortfall.
The most important finding of Attansio et al. is that the two CEX surveys give very different results on inequality. When looking at non‐durables consumption, the interview survey, as found by Slesnick (2001) and Krueger and Perri (2003) shows no change in inequality during the 1990s.17 On the other hand, the diary survey shows consumption inequality rising faster than income inequality.
Attanasio et al. therefore use the findings of McCarthy et al. (2002) to determine which of the two surveys measures each consumption category best. After creating an index using a combination of data from each survey, they find, as we would expect, a change in inequality roughly equal to the average of the changes in each survey alone. Between 1990 and 2000 they found the standard deviation of log consumption rose by
15. See, e.g. the New York Times’ “Economic Scene” column: “inequality of consumption… does not show a significant upward trend.” (Cowen, 1/25/2007) “It is hard to see the effects of increasing income inequality in how people actually live.” (Postrel, 11/7/2002).
16. Notably, Attanasio et al. (2006) and Battistin (2003) use a technique similar to that of the FES to combine data from the interview and diary portions of the CEX.
17. Non‐durables consumption is a common metric in consumption studies, because it avoids the problems associated with treating durable goods as capital.

<center>26</center>

5.4 percentage points, as opposed to the1.0 percentage point found by Krueger and Perri (2003). In the CPS, the standard deviation of log wages rose by about 4 percentage points over the same period. So Attanasio et al. actually find a slightly larger increase in consumption inequality than income inequality....

<center>27</center>

....8.2 Explanations of the Facts
What hypotheses have been proposed to explain the high level and growth of inequality in the US as compared with other OECD countries? One approach taken by Mishel et. al. (2007, p. 357) and others, is to cite a difference in the socio‐political‐economic “system” that differentiates the US from other developed countries, so‐called “American exceptionalism” that dates back to the nineteenth century. In the view of Mishel et. al. (2007), the market‐driven “US Model” leads to more inequality, higher poverty rates, an “expensive‐yet‐underperforming” health care system, and jobs that require more work hours per year and far fewer paid days off. This view is consistent with a view that culture and social norms matter in explaining numerous dimensions of American exceptionalism, of which income inequality is only one.18
18. Others include higher US fertility and relatively low US rankings in league tables of life expectancy and math/science test scores.

<center>29</center>

Yet as Hatjes (2007), the American exceptionalism approach misses the heterogeneity in the level and growth of inequality outside of the US This points to the possibility of numerous models utilizing different combinations of policies and institutions. For instance, the UK pursued de‐unionization in the 1980s as government policy along with privatization, helping to explain the relatively high UK ranking in measures of inequality and its change. In contrast the “consensus model” adopted in the Netherlands and to a lesser extent in Sweden, Ireland, and Germany obtained moderation in wage demands by labor in return in some cases for reduced income taxes and in other cases with the expectations that managers would avoid excess compensation increases for themselves. In Germany excessive executive compensation is mitigated by such institutional features as the two‐tier company board with strong labor representation, “legal co‐determination rights,” and a high tax rate on capital gains from stock options” (Ponssard, 2001).
There is a large body of research on the effects of specific institutions on inequality. One of the most interesting and influential papers in this literature is Alesina and Angeletos (2003), which argues that there may be feedback between current redistribution and preferences for future redistributive policy. When people live in a country with high levels of redistribution, they may believe that those who are rich have only become wealthy through unfair means. This reinforces the preference for redistribution. The reverse may work in situations with low redistribution. They then argue that the multiple equilibria generated by this model may explain the difference between institutions in the US and Europe. Alesina and Ferrara (2005) provide evidence supporting the Alesina‐Angeletos model.
The most recent work empirical work is by Chong and Gradstein (2007), who find that there is a joint relationship between inequality and general institutional quality. Using panel data on a large set of countries over 20 years, they find that inequality drives future institutional quality and that institutions drive future inequality. This relationship holds for a variety of measures of institutions, including indexes of civil liberties, political rights, government stability, corruption, and rule of law. Chong and Gradstein confirm the result that inequality can affect subsequent institutions, found by, e.g. Alesina and Angeletos (2005), Hoff and Stiglitz (2004) and Sonin (2003), and extend it to show that the causation also runs in the reverse direction.19
At the very top level of incomes plotted in Figure 6 for the top 0.1 percent, Piketty and Saez (2006) point out that the divergence between the English‐speaking countries and the others occurs in labor income, not capital income, as the “working rich” have replaced the “rentiers.” They propose three broad classes of explanations. First is SBTC favoring people at the top, but they object that technological changes have
19 Chong and Gradstein provide a concise review of the somewhat small literature on institutions and inequality.

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been similar everywhere while top income shares have not. A second class includes regulations, unions, and social norms, a view that they claim implies that “the surge in executive compensation actually represents valuable efficiency gains. The third class is that the U. S. managerial power explanation that we have associated above with Bebchuk and co‐authors, “the increased ability of executives to set their own pay and extract rents at the expense of shareholders.”
We favor a blend of all three explanations. The market is at work in the increase of market capitalization in the U. S. that spilled over into executive compensation through the greater use of stock options than in other countries. We have supported the managerial power view in our summary of Bebchuk’s work in part 6.4 above. And we have summarized several institutional differences previously in this section.
The greater use of stock options to reward executives in the US than in other countries itself reflects institutional differences. Pfanner (2003) reports that in Germany, only half of the companies in the DAX stock market index have any stock option program at all. He quotes a European compensation expert as saying that “There’s obviously a cultural difference” between the US and Europe regarding stock options. And more than cultural differences are at work. According to Buerke (2000), Belgium taxes stock options when they are granted, while France and the UK impose the tax when the stock is sold. Rules vary so much across European countries that a given gain “could be taxed two or three times on the same option” if a worker moves across national boundaries.
There is an easy explanation of greater equality at the top in Japan—until 1997 stock options were illegal, except at small start‐up companies. Japan loosened its restrictions and also introduced defined‐contribution pension plans in 2001. But there is a long lag in the adoption of stock options by major companies after decades of tradition in which executive pay is many multiples less relative to average worker pay than in the US (Bremner, 1999).
Overall we see no point in trying to find a monocausal explanation of the increase in CEO pay in the US relative to other developed countries. Price‐earnings ratios increased more than in the US than elsewhere, at least through 2000, causing stock market gains to spill over into CEO pay due to the widespread and growing use of stock options. To some extent the lesser use of stock options represents a catch‐up phenomenon, with European companies adopting US practices after a lag of one or two decades.
But there is still room for a complementary institutional explanation based on different policies and regulations. Different laws (e.g., the illegality of stock options in Japan before 1997), different customs (the role of labor on corporate boards in Germany), and different institutions (consensual bargaining in the Netherlands and other countries)

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all play a role in explaining why corporations outside the US have been constrained from offering to their top officers the types of pay packages typical in the US
9. Conclusion
This paper has provided a comprehensive survey of the increase in American inequality since 1970. Our discussion treats the evolution of labor’s share, the change in 90‐50‐10 ratios of incomes “at the bottom,” hypotheses about the evolution of the 90‐50‐10 ratios, nuances in the hypothesis of skill‐biased technical change (SBTC), the causes of increased inequality within the top 10, 1, 0.1, and 0.01 percent, the distinction between consumption and income inequality, and international differences in the evolution of inequality, especially at the top.
We argued in section 2 that there have been no interesting changes in labor’s share of national income over the last two decades, once a consistent cyclical chronology is applied. Over the full period 1950–2006 labor’s share has risen, not fallen, but once the labor portion of proprietor’s income is added in, labor’s share has been almost exactly flat for more than 50 years. Further, we point out that labor’s share in national income is not related to the current debate about increased inequality. If the labor income of the highest‐paid workers increased enough, we could observe simultaneously an increase in labor’s share and a decline in the real income of the median worker.
Section 3 documents the evolution since the late 1970s of the 90‐50‐10 ratios from CPS data for men, for women, and for both together. Our most important finding is that all discussions of income by percentile below the 90th must distinguish carefully between men and women. We were surprised to learn that the 90‐10 income ratio for women has increased by fully double the increase for men. While the 90‐50 ratio for both men and women increased slowly and steadily from 1979 to 2005, the 50‐10 ratio showed a sharp jump in 1979–86 that was twice as large for women as for men. Then the 50‐10 ratio remained on a high plateau for women about 20 percent above its 1979 value, while for men the 50‐10 ratio gradually slipped back to its 1979 value.
In examining causes for these changes, we focus on four elements, the decline of unionization, the increase of trade, the increase of immigration, and the decline in the real minimum wage. The sharp concentration of the increase in the 50‐10 ratio for both men and women on the 1979–86 interval provides strong circumstantial evidence for declining unionization as a cause for men and the declining real minimum wage as a cause for women. The timing of the subsequent post‐1986 evolution of the real minimum wage is also consistent with the stable 50‐10 ratio for women. Our examination of quantitative evidence in the academic literature found a small role for the decline in unionization, but only for men. There is little solid evidence for any effect of increased trade. The immigration literature is contentious, but we were convinced by a recent paper showing negligible impact of increased immigration on domestic workers

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but rather a big downward impact on foreign‐born workers who specialize in certain occupations.
Section 5 reviews the SBTC hypothesis and potential objections to it, particularly the slow wage increases of apparently skilled occupations like engineers and computer programmers, compared to the rapid income gains of managers. We endorse the effort by Autor and co‐authors to broaden the skill distinction to three or more categories; their polarization hypothesis makes a lot of sense in explaining the facts about rising inequality and also the occupations most prone to outsourcing. The key distinction is between interactive work at the top, whether lawyers in courtrooms or investment bankers making deals in person, and interactive work at the bottom, whether attendants in nursing homes or immigrant workers mowing the lawns of well‐off people, as contrasted with a broad middle where people do routine, easily duplicative jobs that are easily outsource, such as airline reservations agents or workers at technical call centers.
Section 6 finds ample evidence that SBTC is a major explanation of increased skewness of labor incomes at the top. We distinguish three different types of top incomes. Superstars include the top members of any occupation that provides disproportionate rewards to the first‐best as contrasted to the second‐best. The pure superstar phenomenon has at its core the magnification of audiences, the fact that a single performance can be witnessed by an audience of one person or ten million people, depending on the perceived attraction and talent. A second category of top incomes is market‐driven and includes law partnerships, investment bankers, and hedge fund managers, where there is no obvious analogy to audience magnification.
The most contentious question regards the third category, that is, the sources of enormous increases in the ratio of top executive compensation to that of average workers. The core distinction is that superstars and other market‐driven occupations have their incomes chosen by the market, whereas CEO compensation is chosen by their peers in a system that gives CEOs and their hand‐picked boards of directors, rather than the market, control over top incomes. This idea that managers have power over stockholders is nothing new; it goes back to Berle and Means (1932) and R. A. Gordon (1945) that managers control stockholders rather than vice versa. This idea that the principal‐agent control of stockholders should be reversed has been applied fruitfully by such authors as Bebchuk and Fried. We endorse their idea that managerial power lies behind some of the outsized gains in CEO pay, while also recognizing that stock options created an automatic spillover from the stock market gains of the 1990s directly into executive pay.
Has consumption inequality also risen as much as income inequality? If increased cross‐sectional income inequality is simply the result of larger transitory shocks to income, and if financial markets are sufficiently well developed (assuming, against substantial evidence to the contrary, that liquidity constraints are not a major

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impediment), then consumption and welfare inequality could have stayed constant. In reviewing the evidence, it is clear that consumption data in the US does not measure exactly what we might hope for. While authors have found parts of the CEX show consumption inequality to be flat, other more believable parts of the CEX show consumption inequality to rise at roughly the same rate as income inequality. This evidence is consistent with that of Kopczuk, Saez, and Song (2007) who find that there has been no increase in income mobility associated with the rise in income inequality.
Some of the most interesting remaining issues in the area of increased inequality involve cross‐country differences. A consensus shows that the post‐1970 upsurge in US inequality is much greater than in continental Europe or Japan, with the UK and Canada somewhere in between. We propose a mix of institutional and market‐driven explanations. Institutional differences between the US and Europe include the earlier and more pervasive introduction of stock options in the US, the tradition of corporatism and cooperative bargaining in Europe that creates constraints on management compensation excess, and the larger role of unions and a higher real minimum wage in some European countries. But the market matters also; gains in profits and price‐earnings ratios in the US stock market in the 1990s spilled over to executive compensation, interacting with the large increase in the share of executive compensation taking the form of stock options.
The study of income inequality is of fundamental importance to economics. The most obvious reason is that if economics is at all concerned with understanding the development of the economy over time, we must understand not only changes in means, but also changes in distributions. Second, changes in inequality can be indicative of changes in the structure of the economy that may favor one group or another, e.g. skill‐biased technical change. Third, variation in inequality can tell us how well our theories about risk sharing and consumption smoothing actually fit with peoples’ experiences. Fourth, we can learn about the effects of various institutions on the inequality by studying the experiences of different countries. This allows informed policy choices to be made in the future. What these policy choices should be, if any, are beyond the reach of this paper. We have attempted to link facts and hypotheses, and some of these links are clearly robust. These facts should be taken into account in policy discussions, and some, simply by being aired, may improve outcomes in the economy.

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ngdawg · 02-16-2008, 07:45 PM

Host, can't YOU just read what you're deriving your info from, quote bits and link the rest? My old eyes can't handle all that and if they could, my old brain wouldn't absorb it....

I can see where the numbers mentioned in the OP could come into play.
Mr. H earns 1.5 million a year and buys 3 Mercedes.
Mr. J earns 150,000 a year and buys 3 Toyotas
Mr. X earns 50,000 a year and buys a used Volvo and 2 bicycles.
It's all relative....the problem as I see it (as a usually struggling so-called middle classer), is that those that earn less don't get a break just because of that factor. If I want a Mercedes, I can't go to the dealer and say I'm paying X per cent because I only earn X dollars. That would balance things out a bit, but it ain't gonna happen.

The op-ed makes sense. F'rinstance: Our weekly insurance payout is $105. The company owner's weekly payout is $105. But, he earns more, so the chunk isn't as huge for him, essentially making his disposable income larger. Same with things like cable, cell phone bills, etc. They might vary, but not in keeping with income, so that those of us on the lower end of the pay scale see less play money than those on the higher end, so of course, our ratios are much less.

A friend of mine had a good analogy. He was told by his superiors that instead of overtime, he'd be given comp time for the extra hours. His response, "Yea, I'll just go into Home Depot and instead of cash, tell them I'm gonna pay them in comp time."

Willravel · 02-16-2008, 07:48 PM

Did everyone miss #6?

ngdawg · 02-16-2008, 08:13 PM

Quote:

Originally Posted by willravel

Did everyone miss #6?

Nope, but anything with more than 3 numbers in it makes my eyes glaze over....then host posted....

host · 02-16-2008, 08:19 PM

Quote:

Originally Posted by ngdawg

Host, can't YOU just read what you're deriving your info from, quote bits and link the rest? My old eyes can't handle all that and if they could, my old brain wouldn't absorb it....

I can see where the numbers mentioned in the OP could come into play.
Mr. H earns 1.5 million a year and buys 3 Mercedes.
Mr. J earns 150,000 a year and buys 3 Toyotas
Mr. X earns 50,000 a year and buys a used Volvo and 2 bicycles.
It's all relative....the problem as I see it (as a usually struggling so-called middle classer), is that those that earn less don't get a break just because of that factor. If I want a Mercedes, I can't go to the dealer and say I'm paying X per cent because I only earn X dollars. That would balance things out a bit, but it ain't gonna happen.

The op-ed makes sense. F'rinstance: Our weekly insurance payout is $105. The company owner's weekly payout is $105. But, he earns more, so the chunk isn't as huge for him, essentially making his disposable income larger. Same with things like cable, cell phone bills, etc. They might vary, but not in keeping with income, so that those of us on the lower end of the pay scale see less play money than those on the higher end, so of course, our ratios are much less.

A friend of mine had a good analogy. He was told by his superiors that instead of overtime, he'd be given comp time for the extra hours. His response, "Yea, I'll just go into Home Depot and instead of cash, tell them I'm gonna pay them in comp time."

ngdawg, I believe that wealth= power= political control. I believe that voting numbers in a democratic republic, should result in a triumph of the will of the sheer numbers, over the vested interests of the wealthiest few. IMO, that isn't happening in the US, and it hasn't since at least 1948.

I believe that the very wealthy beisiege the rest of us with a strategy of funding lobbies, think tanks, a media blitz to convince enough of us to vote against our own best interests, which is to tax the shit out of the wealthiest one percent, as we did do well, into the early 1960's. Outside of the legalization and enforcement of collective bargaining rights of workers, nothing else has significantly helped to "level" the playing field between the wealthiest, and the rest of us.

If you think that I am wrong, why do you think the records of the TNEC 1938to 1941 hearings and investigations into wealth and power in America, are still sealed?
http://www.archives.gov/research/gui...roups/144.html

loquitur · 02-16-2008, 08:27 PM

no, will, I didn't miss #6. I even chuckled a bit. I know your tongue was in your cheek, but it did touch on an aspect of what I'm trying to get at here. The question it raises is, "what are we measuring?"

Are we measuring people's happiness and well-being? Do we care about people having different amounts of physical things (of which money is the main one) because we think that money/things make them happy? And if that's the case, is there some other way of measuring happiness that is more reliable than the number of things people have? If that's NOT the case, why do we care about people having different numbers of physical things?

Again: I'm trying to get at WHY economic inequality matters. Not that it should be ASSUMED it matters, but that the reasons should be articulated. I agree does matters at some level, but I suspect my level and reason differs from others'.

Host, I'm ignoring your post now because you refuse to stick with the topic. You simply assume things and then berate me for not signing on to your assumption. That's not what this thread is about.

Ustwo · 02-16-2008, 08:32 PM

Quote:

Originally Posted by host

I believe that the very wealthy beisiege the rest of us with a strategy of funding lobbies, think tanks, a media blitz to convince enough of us to vote against our own best interests, which is to tax the shit out of the wealthiest one percent, as we did do well, into the early 1960's.

The top 1% pays 39% of the total federal taxes, and that number is up 2% from when Bush took office.

I don't think you really have an idea of what you are talking about. The wealthy pay pretty much all of the federal taxes as it is. You just want to punish them for being wealthy and steal it from them in the name of the people.

Edit: Sorry loquitur I couldn't let it pass and I should have.... *zip*

loquitur · 02-16-2008, 08:33 PM

re #13 - mixedmedia, you're right, but that's a measurement problem. I suspect that if you factored that in, the overall numbers would change somewhat, but the overall thesis that consumption disparities are less than income disparities would persist. As I said in the OP, I'm not sure that consumption is the relevant measure of economic well-being as distinct from income, and I'm not sure that income is either. It all depends on what we're really trying to evaluate: what kinds of disparities should we care about, and why. We can't sensibly answer the question of what (if anything) to do about disparities until we figure out why they are important.

Willravel · 02-16-2008, 08:47 PM

Quote:

Originally Posted by loquitur

no, will, I didn't miss #6. I even chuckled a bit. I know your tongue was in your cheek, but it did touch on an aspect of what I'm trying to get at here. The question it raises is, "what are we measuring?"

Are we measuring people's happiness and well-being? Do we care about people having different amounts of physical things (of which money is the main one) because we think that money/things make them happy? And if that's the case, is there some other way of measuring happiness that is more reliable than the number of things people have? If that's NOT the case, why do we care about people having different numbers of physical things?

Again: I'm trying to get at WHY economic inequality matters. Not that it should be ASSUMED it matters, but that the reasons should be articulated. I agree does matters at some level, but I suspect my level and reason differs from others'.

Ah, you did get it.

To get more to the point from my last post, maybe we should specify what we're specifically trying to show via the data. Because people are subjective regarding stats like this, it would be better to simply provide as much raw data as possible and then let people answer the questions you're asking on a person by person basis. I suspect that my measurement of financial happiness may be different than someone else's, and as such it'd be good for me to read data instead of conclusions made by people who have their own subjective conclusions.

In my opinion economic inequality has to do with numerous factors, but starts at income per household, depending on location. Right now I'm in the 83k after taxes area, which would be great in many places, but is rather mid-range here in San Jose, even with the housing market in shambles. So when I want to get an updated informed opinion regarding economic inequality, I'd want access to localized incomes per household.

dc_dux · 02-16-2008, 08:55 PM

Unfortunately, one of the best federal websites that lists all the best economic indicators in one place, EconomicIndicators.gov, is being shut down by the Bush administration next week due to "budgetary constraints".

Damn...how much does it cost to maintain a website...or why does Bush want to make it that much more difficult to find economic data?

loquitur · 02-16-2008, 09:03 PM

Will, I extracted two words from your post - financial happiness - because I think they are very telling. The money isn't what makes you happy; you can't eat money or live in money or drive it. What the money does is let you get things that you think will make you happy. It's a tool or a proxy, it's not an end in itself.

Willravel · 02-16-2008, 09:07 PM

Quote:

Originally Posted by loquitur

Will, I extracted two words from your post - financial happiness - because I think they are very telling. The money isn't what makes you happy; you can't eat money or live in money or drive it. What the money does is let you get things that you think will make you happy. It's a tool or a proxy, it's not an end in itself.

I absolutely agree. That's really why raw data is so important. In order to draw comparisons between income and happiness, you'd need the income data and psych studies about contentment. That would take a ton of work and create a lot of data. Short of that, we're really in the dark.

loquitur · 02-16-2008, 09:09 PM

Does that mean that you think happiness is the relevant thing we should be looking at rather than income (even if you could adjust the income by region to make it comparable)?

ngdawg · 02-16-2008, 09:10 PM

Quote:

Originally Posted by host

ngdawg, I believe that wealth= power= political control. I believe that voting numbers in a democratic republic, should result in a triumph of the will of the sheer numbers, over the vested interests of the wealthiest few. IMO, that isn't happening in the US, and it hasn't since at least 1948.

I believe that the very wealthy beisiege the rest of us with a strategy of funding lobbies, think tanks, a media blitz to convince enough of us to vote against our own best interests, which is to tax the shit out of the wealthiest one percent, as we did do well, into the early 1960's. Outside of the legalization and enforcement of collective bargaining rights of workers, nothing else has significantly helped to "level" the playing field between the wealthiest, and the rest of us.

If you think that I am wrong, why do you think the records of the TNEC 1938to 1941 hearings and investigations into wealth and power in America, are still sealed?
http://www.archives.gov/research/gui...roups/144.html

Wealth=power=political control only goes so far. Yea, you likely won't see a welfare mother hold public office because she doesn't have the funds to run, but it's more than likely she also doesn't have the education.
However, that welfare mom can vote, so that wealth/political power is dependent on that.

It's only fair that the wealthiest pay more taxes. People have continuously for decades have touted that flat tax idea, where everyone just shells out, say, 25% of their income regardless. I hate this idea, think it's stupid. I like my tax deductions. My kids are tax deductions, my house is a tax deduction and I get a refund that goes back into the economy because I then buy shit I couldn't afford the preceding 11 months.

Level the playing field? Last I knew, this wasn't a financially socialist country. The majority of the wealthy in the country worked for what they have, are frugal in many ways, are savvy investors and do their part to keep the economy going because that affects their lives, perhaps more than ours down here in the lower quarter. If you mean that, while I pay $105 for health coverage, they should pay $1050, that comes into play in other areas, primarily taxes. But, as I mentioned earlier, if that were to be the case, then I should be able to buy a new Mercedes for 10 grand. Some things are just unrealistic, no matter how you try to spin it.

Willravel · 02-16-2008, 09:19 PM

Quote:

Originally Posted by loquitur

Does that mean that you think happiness is the relevant thing we should be looking at rather than income (even if you could adjust the income by region to make it comparable)?

The thread did start with top halves and bottom halves and then moved more into happiness... so it'd make sense to see if data could support the idea that there's an association between income brackets and happiness. Shoot, it'd be even more helpful to compare perceived happiness with the type of happiness that can be documented by behavioral patterns by a psychologist... and then compare that to incomes.

I personally believe that happiness is more important than income because I've found that while material pursuits are fun they're ultimately unfulfilling compared to finding a place in life to he happy. That hardly means that my answer is the only answer, which gets back to my comment regarding subjectivity. Not everyone finds materialism unfulfilling as a core of existence. Some may actually find true happiness in it. That's why I believe in factual data for everyone so they can draw their own subjective conclusions.

The_Jazz · 02-17-2008, 08:00 AM

Future posts that do not conform to the rules and topics set out in the OP will be deleted. The original poster has the right to set the rules and direction of the thread. Please abide by those, especially since you will expect the same in your own threads.

loquitur · 02-17-2008, 08:26 AM

Will, I'm with you. Even if you stipulate that economic well-being is a relevant measure, neither income nor consumption by itself will capture that concept adequately.

But if well-being is what we think is the relevant determinant, then income inequality or perhaps even wealth inequality, is not a particularly important factor. Some people are miserable even with all the doodads in the world, others are happy even in a hut. Different people are different - they have different abilities, different needs, different desires. My own feeling on this is that we should care if people have a roof over their heads, clothes on their bodies and basic nutrition, but not whether they have a home that isn't as nice as someone else's, clothes that aren't as fancy or food that isn't as sumptuous.

roachboy · 02-17-2008, 08:52 AM

but if you want to talk about well-being, then (again) the problem arises of what that means.

one could consider well-being as relational, in the sense that a measure of well-being can refer to system criteria. this would imply that the overall socio-economic context matters when you try to think about how particular social positions define themselves.

this seems axiomatic. i am bewildered by claims to the contrary. they don't make any fucking sense. it doesn't matter that they are consistent with conservative political views--except in that it functions as a little demonstration--as if any were needed--that those economic views make no sense either.

another--which is being argued for in the op, and which continues to be argued for--to the extent that refusing to consider basic questions can be confused with argument---would treat well-being as entirely subjective.
this would be the "how do you feel today" index.
"are you feeling ok?"
"how many of you feel ok?"

these are fundamentally different.

without stipulating "relative to what" any measure is meaningless.

and this before you get to the rat's nest:
(a) how you'd go about *measuring* "well-being"--which is self-evidently linked to how you define the term...

and even worse (b) how you'd go about distinguishing "well-being" from a reflection of ideological factors.

by the last point, i basically mean is--for example---if we live in a consumer culture in which every commodity is pitched at potential buyers as a gateway to happiness at one level or another, then an overall effect of the range of such pitches is to imply--continually--that you, the consumer--are happy--but in such a way that this happiness can be perfected and that perfectedness is always one commodity away--that this opens onto an infinite series is irrelevant. but you see the problem: well-being can be a function of what an old french communist party intello-type called interpellation: that is of the way in which you, spectator, are positioned by the way in which data that passes through a particular instituted space (advertising and its relay systems). so the sense of well-being can measure nothing more than the subjective sense of adjustedness to norms which are derived from the cumulative effect of advertising--in which case an index can measure nothing meaningful beyond the efficacy of advertising.

this loops back around onto the question of what you think economic data is supposed to do. if you expect it to provide an accurate image of the system, then "well-being"--particularly a subjective notion of it--is close to worthless. but if you think economic data is an extension of political ideology, then it can fit right into the affective circle-jerk at the center of conservative economic theory--and this because data about the actual world is secondary for most of us--the folk who exercise power may or may not need it--but you and i definitely dont need it.

Willravel · 02-17-2008, 10:23 AM

Liq - I do see what you're saying and I agree, which is why it'd be important to actually see how "happiness" stacks up against income. Once one could get a decent comparo going, then we could say "money doesn't mean happiness" or "30% of people above x income are happy".

Quote:

Originally Posted by roachboy

this seems axiomatic.

This is absolutely true, but it's really the only method by which someone can put fourth "factual" evidence about happiness right now. In reality, happiness is WAY too subjective and the esoteric studies that include good data really can't help anyone.

loquitur · 02-17-2008, 03:15 PM

If the relationship of money and well-being or happiness is tenuous, why should we care as much as we do about inequalities of money? Above a certain floor of physical need, everyone's needs and desires - and satisfactions - are different.

host · 02-17-2008, 03:23 PM

Quote:

Originally Posted by loquitur

If the relationship of money and well-being or happiness is tenuous, why should we care as much as we do about inequalities of money? Above a certain floor of physical need, everyone's needs and desires - and satisfactions - are different.

Nicely done...wealth inequity is simply a state of mind...nothing to see here, folks, move along, move along....

I posted challenges to the NY Times article in your OP, and of it's authors, and of every endorsement you made about that article in your OP. Your response indicated that you were not interested in discussing the validity of the OP article, because, somewhere after the OP was posted, a new restriction mandated the discussion to be solely about feelings.

mixedmedia · 02-17-2008, 04:14 PM

What the hell does one's happiness have to do with their ability to pay the rent, the power bill, the car payment, etc.? The crux of income equality is not, 'oh, poor Mr. Jones' car isn't nearly as nice as rich Mr. Potter's. Poor Mr. Jones.' It's 'poor Mr. Jones is having to make the choice this month between paying his car payment and feeding his kids while rich Mr. Potter doesn't even have to pay for his car (or his gas or his car washes or his car repair, for that matter) because it's part of his 'income.'

If people can't even conceive that the problem is not not being able to buy the nicest things, but in fact not being able to afford to even subsist within the societal framework that has been provided for us without making hard choices every month then you don't have any business having this discussion.

No material things do not buy happiness. And not being able to pay your bills every month does not necessarily rob you of happiness. Therefore 'happiness' as a factor in determining the fairness of the ever-widening income disparity in this country is a moot point. And a frigging weird one, too...in my opinion.

Tully Mars · 02-17-2008, 05:28 PM

Quote:

Originally Posted by willravel

Liq - I do see what you're saying and I agree, which is why it'd be important to actually see how "happiness" stacks up against income. Once one could get a decent comparo going, then we could say "money doesn't mean happiness" or "30% of people above x income are happy".

This is absolutely true, but it's really the only method by which someone can put fourth "factual" evidence about happiness right now. In reality, happiness is WAY too subjective and the esoteric studies that include good data really can't help anyone.

I saw a study a few years back regarding happiness and wealth. I really just skimmed it so things like baselines etc... I really can't speak about. But the bottom line of the study was it found the happiest people, least in the US, were people whose household income for a family of , I think, four was between 75K-100K. It was several years back so this would have been upper middle class, but certainly not rich by any means.

After reading through it a couple things stuck in my head. One, it's really hard to be happy if you're worried you might end up living in your car in the near future, even harder if you think you might not even have a car for shelter. Basically there's a level of income needed simply to survive on a day to day basis, without it happiness is not really an option. And two, having a shit load of money does not make you happy. Having more and more material things will not bring you happiness. In fact the study basically said really wealthy people tend to be less happy then the middle class.

loquitur · 02-17-2008, 08:11 PM

Actually, MM, if you look at what I was saying, I was positing that there is a level of income below which we should be concerned about the person. In a rich society like ours everyone should have access to basic nutrition, clothing and shelter. But if a person's basic needs are taken care of, then no, I don't think income inequality in and of itself is a problem.

At some point, railing against the "rich" is just plain and simple envy, which is a poisonous emotion, more for the person who has it than that person's target. And then there is the question of how you define "rich" - I have yet to get a coherent definition from the redistributionists that amounts to anything other than "someone who has more than I do." And bear in mind that that works both ways: there are people who have less than you who would want some of what YOU have, too. To them, YOU'RE rich. Whatever principle you might articulate to justify taking stuff away from people who have more than you merely because they have it can also be used to justify taking stuff away from you.

Where I'm going with this is here: at least in this country, simple inequality of income in and of itself is not a bad thing, unless the inequality came about because of theft or some other kind of bad conduct. If you're talking about ancien regime France, or Tsarist Russia, with a hereditary and useless aristocracy, that's one thing. But that's not this country. Most wealth in this country is earned. Yes, there is a luck element - there always is - but it doesn't explain all the disparities even remotely.

I have yet to hear an explanation of why simple inequality of income, in and of itself, is something we have to somehow "fix", when there are so many other unequal endowments people have that no one seems to be interested in fixing. Some people happen to be very good at making money. Other people, like me, are good at other things. So?

Ustwo · 02-17-2008, 08:51 PM

Quote:

Originally Posted by loquitur

Actually, MM, if you look at what I was saying, I was positing that there is a level of income below which we should be concerned about the person. In a rich society like ours everyone should have access to basic nutrition, clothing and shelter.

Could you clarify what you mean by 'access'.

Do you mean the ability to work for them, or the ability to have them regardless?

ngdawg · 02-17-2008, 09:31 PM

Quote:

Originally Posted by loquitur

Actually, MM, if you look at what I was saying, I was positing that there is a level of income below which we should be concerned about the person. In a rich society like ours everyone should have access to basic nutrition, clothing and shelter. But if a person's basic needs are taken care of, then no, I don't think income inequality in and of itself is a problem.

At some point, railing against the "rich" is just plain and simple envy, which is a poisonous emotion, more for the person who has it than that person's target. And then there is the question of how you define "rich" - I have yet to get a coherent definition from the redistributionists that amounts to anything other than "someone who has more than I do." And bear in mind that that works both ways: there are people who have less than you who would want some of what YOU have, too. To them, YOU'RE rich. Whatever principle you might articulate to justify taking stuff away from people who have more than you merely because they have it can also be used to justify taking stuff away from you.

Where I'm going with this is here: at least in this country, simple inequality of income in and of itself is not a bad thing, unless the inequality came about because of theft or some other kind of bad conduct. If you're talking about ancien regime France, or Tsarist Russia, with a hereditary and useless aristocracy, that's one thing. But that's not this country. Most wealth in this country is earned. Yes, there is a luck element - there always is - but it doesn't explain all the disparities even remotely.

I have yet to hear an explanation of why simple inequality of income, in and of itself, is something we have to somehow "fix", when there are so many other unequal endowments people have that no one seems to be interested in fixing. Some people happen to be very good at making money. Other people, like me, are good at other things. So?

I don't feel it is something that has to be "fixed". Why? Income, by and large, is earned and it's earned based on several factors, not the least of which is education. So, you may argue that the poor can not afford an education that would get them out of their poverty....but our higher education institutions reward hard work in high school with scholarships. Armed services pay for education as well. If someone in poverty does well in high school, they could even go to West Point and that costs nothing-they get paid while going because it's Army. There are ways around everything. But there has to be that desire to get there first.
A few years back, the news magazine, 20/20 did a report on poverty in the US. They visited what was, at the time, the poorest area in the country-a neighborhood in the Bronx. In visiting apartments, they found VCR's, microwave ovens, color tvs among sparsely furnished dilapidated apartments.
When the article quoted in the OP speaks about the spending disparity lessening among the income groups, this is what they mean.
To bring it further into perspective, a personal anecdote: I just completed our tax report. After deductions, our income came to just over $21k( $15k alone was the mortgage interest deduction). We are a family of four. Our monthly bills are over $3,000. 12x3 is more than 21k, obviously. Yet, I am typing this on a brand new Dell, taking photos with two DSLR's, we have two more computers, a total of 7 digital cameras, 3 cell phones, a house and two cars less than 10 years old. By any standard, we would be considered, at best, lower middle class. The net income puts us at poverty level, but we probably have more than some people that have much more income.
Are we hurting monetarily? We were. Our credit card debt is about $15K and isn't going down very quickly. Are we happy with our lot? Yep. Does one have to do with the other? To an extent. It's no fun being in deep debt. It weighs heavily on everything, controls everything you do or attempt to do. Are we happier than those who are wealthy? Don't know, don't care.
Perhaps the editorial felt that those on the lower scale of income were on the higher scale of consumption in some mistaken belief that things bring contentment? That's where that data is useless to an observer. Without reasoning behind the disparities, no one can say what makes a group happier as a rule than not.
Hope that made sense.

Willravel · 02-17-2008, 09:51 PM

Quote:

Originally Posted by loquitur

If the relationship of money and well-being or happiness is tenuous, why should we care as much as we do about inequalities of money?

That's a big "if". There may be a correlation or even causation in the relationship. Until further research is done, there's really no way to know with any measure of certainty.

Quote:

Originally Posted by Tully Mars

I saw a study a few years back regarding happiness and wealth. I really just skimmed it so things like baselines etc... I really can't speak about. But the bottom line of the study was it found the happiest people, least in the US, were people whose household income for a family of , I think, four was between 75K-100K. It was several years back so this would have been upper middle class, but certainly not rich by any means.

Well first of all booyah. It's good to know I'm in the happy bracket. I'd love to see this study.

02-13-2008, 11:38 AM	#2 (permalink)
roachboy Super Moderator Location: essex ma	i dont see the logic behind any argument that would replace data on income with data on consumption rates/levels--but i would have no problem with datasets that juxtaposed the two--the difference between the lines you might draw would be a nice image of credit and it's role--and that seems to me one level of what this question turns on, really: what to do and how to think about the pervasive role played by consumer credit in driving expenditures. there's a second problem: the relation of these expenditure levels to the problems of structural inequality in the distribution of wealth is different, it seems to me: IF one were to replace data about income with data about consumption levels, it would have the effect of minimizing the appearance of economic inequality. but everyone would know--at least for a while--until they forgot about it--that nothing particular has actually changed about the distribution of wealth except what is now being used to index it. on this, the question seems to me not to be whether you imagine inequalities in the distribution of wealth to be a problem or not, but rather what statistics are to do, what they measure and why they measure it--and whether it is a good idea to be cavalier about switching indices in order to generate or reinforce ideological biais or for political advantage (think about the reagan redefinition of inflation rates by excluding from them what causes inflation rates to rise...what good has it done, beyond enabling reagan to say he "did something" about inflation)---if you think statistics are an extension of politics, then you'll land in one place on this--if you think that it's a good idea for policy-makers to have something approaching an accurate picture of the socio-economic realities they are supposed to administer/interact with, even if that picture poses problems--then you'd land in another. ========== as a counter to the edito quoted in the op, here's an editorial from this morning's ny times by robert reich. make of it what you will in general, but it sure raises problems for the op edito: http://www.nytimes.com/2008/02/13/opinion/13reich.html __________________ a gramophone its corrugated trumpet silver handle spinning dog. such faithfulness it hear it make you sick. -kamau brathwaite

02-13-2008, 01:10 PM	#3 (permalink)
Ustwo Pissing in the cornflakes	Its an interesting way to look at it, though I can see it being more of a way for a 'progressive' to justify more government confiscation of someones property. After all if you only consume two times as much you don't need to make 5 times as much, at least in some of their logic. The real issue as I see it is 'so what?'. Outside of the handful of mega rich, the lifestyle of the wealthy is not a whole lot different than the middle class which isn't that much different from 'the poor'. There are people, actors, elite athletes, CEO's who will make more in a year than I will my entire life. So what? Does their wealth hurt me, or anyone else? As long as people are not unfairly being kept 'down' then it doesn't really matter what someone makes. When I see people starving in the streets, dying of curable diseases because they are refused treatment due to poverty, when hopelessness is due to the system not allowing hard work to succeed, then let me know. __________________ Agents of the enemies who hold office in our own government, who attempt to eliminate our "freedoms" and our "right to know" are posting among us, I fear.....on this very forum. - host Obama - Know a Man by the friends he keeps.

02-13-2008, 01:45 PM	#6 (permalink)
Willravel ... a sort of licensed troubleshooter.	Maybe a better way to do this would be to set up different systems of comparison and label them. Some systems clearly do have inequalities in represented data and as such should be recognized as such, but that hardly means that all systems have the same equalities or that even all systems are unequal. Yes, my solution does require that one learn new things gasp, but quite frankly, I believe that if one is to stay adequately informed it takes work. Edit: I'll add a rudimentary example of what I'm talking about. Once upon a time when Maths were in their infancy, people wanted to understand averages. The problem? There are different ways to calculate averages. Man 1 firmly believed that the best way was to present the usual average (4 + 4 + 6) ÷ 3 ~ 4.6 Man 2 firmly believed that the middle number was the average. ( 1, 2, 3, 4, 5) Man 3 absolutely believed the number that is repeated more often than any other is the average (1, 1, 2, 3, 4, 5, 5, 5, 6, 7, 8), and he was also sleeping with man 1's wife, but that's moot. What was done? Each was given a name—mean, median, and mode—and maths smiled. Last edited by Willravel; 02-13-2008 at 01:52 PM..

02-13-2008, 02:10 PM	#8 (permalink)
roachboy Super Moderator Location: essex ma	uh...because economic inequality has fuck all to do with arbitrary physical attributes like height. it is a political question that follows from the way in which capitalism works. this is not rocket science. it is not a surprise. it is not news. and you can't collapse inequality in the capitalist context into some endless history of inequality if you want to say anything meaningful because the basis for it is fundamentally different--you know, generalized wage relations as over against ownership of the means of production concentrated in the hands of a particular social class (complicated by the stock and again by the transformations in stock ownership of the past 30 years in the states--but the point still basically holds) it's a bad analogy. __________________ a gramophone its corrugated trumpet silver handle spinning dog. such faithfulness it hear it make you sick. -kamau brathwaite

02-16-2008, 06:42 PM	#12 (permalink)
loquitur Junkie Location: NYC	host, please read the OP and stick with what the topic of discussion is here. You can start your own thread if you want to lecture people on topics you want to discuss. The question was, what kinds of inequality matter and why. If you have something to say about it, do. Otherwise, please don't clutter up the thread. Last edited by loquitur; 02-16-2008 at 06:49 PM..

02-13-2008, 01:18 PM	#4 (permalink)
loquitur Junkie Location: NYC	Well, those two posts just now point to two different views of whether we should care about inequality. My additional question was which kinds of inequality we should care about, and why.

02-13-2008, 01:56 PM	#7 (permalink)
loquitur Junkie Location: NYC	One economics blogger whom I read frequently had the following question: why do we care about economic inequality but we don't care about inequality of things like sports ability, physical attractiveness, or height. Each of those can seriously affect a person's sense of self and well-being. For instance, I was always the kid picked last when teams got chosen up. It wasn't fun at all. Jocks tend to attract the most attention. Why isn't that something people get incensed about? Basic athletic ability isn't earned, it's something you're born with. Isn't this an unfair inequality? Why do we tolerate it? Or physical appearance - that one really is unearned.

02-13-2008, 02:17 PM	#10 (permalink)
loquitur Junkie Location: NYC	the reason I'm raising these, roachboy, is because I want to try to get people to isolate what it is about inequality that bothers them (IF it bothers them). I thought that pointing to different kinds of unequal endowments would get people to articulate what is similar or different among the various kinds. Your post just restated a conclusion without analyzing.

02-16-2008, 06:57 PM	#13 (permalink)
mixedmedia has all her shots. Location: Florida	I think, in order to really assess the impact of 'comsumption,' there needs to be an allowance for the amount of 'consumption' that is done by the wealthy for them in the form of employment 'perks' and 'benefits' that the poor do not have privy to. This is not an unsubstantial number. __________________ Most people go through life dreading they'll have a traumatic experience. Freaks were born with their trauma. They've already passed their test in life. They're aristocrats. - Diane Arbus PESSIMISM, n. A philosophy forced upon the convictions of the observer by the disheartening prevalence of the optimist with his scarecrow hope and his unsightly smile. - Ambrose Bierce

02-16-2008, 07:45 PM	#15 (permalink)
ngdawg peekaboo Location: on the back, bitch	Host, can't YOU just read what you're deriving your info from, quote bits and link the rest? My old eyes can't handle all that and if they could, my old brain wouldn't absorb it.... I can see where the numbers mentioned in the OP could come into play. Mr. H earns 1.5 million a year and buys 3 Mercedes. Mr. J earns 150,000 a year and buys 3 Toyotas Mr. X earns 50,000 a year and buys a used Volvo and 2 bicycles. It's all relative....the problem as I see it (as a usually struggling so-called middle classer), is that those that earn less don't get a break just because of that factor. If I want a Mercedes, I can't go to the dealer and say I'm paying X per cent because I only earn X dollars. That would balance things out a bit, but it ain't gonna happen. The op-ed makes sense. F'rinstance: Our weekly insurance payout is $105. The company owner's weekly payout is $105. But, he earns more, so the chunk isn't as huge for him, essentially making his disposable income larger. Same with things like cable, cell phone bills, etc. They might vary, but not in keeping with income, so that those of us on the lower end of the pay scale see less play money than those on the higher end, so of course, our ratios are much less. A friend of mine had a good analogy. He was told by his superiors that instead of overtime, he'd be given comp time for the extra hours. His response, "Yea, I'll just go into Home Depot and instead of cash, tell them I'm gonna pay them in comp time."

02-16-2008, 07:48 PM	#16 (permalink)
Willravel ... a sort of licensed troubleshooter.	Did everyone miss #6?

02-16-2008, 08:27 PM	#19 (permalink)
loquitur Junkie Location: NYC	no, will, I didn't miss #6. I even chuckled a bit. I know your tongue was in your cheek, but it did touch on an aspect of what I'm trying to get at here. The question it raises is, "what are we measuring?" Are we measuring people's happiness and well-being? Do we care about people having different amounts of physical things (of which money is the main one) because we think that money/things make them happy? And if that's the case, is there some other way of measuring happiness that is more reliable than the number of things people have? If that's NOT the case, why do we care about people having different numbers of physical things? Again: I'm trying to get at WHY economic inequality matters. Not that it should be ASSUMED it matters, but that the reasons should be articulated. I agree does matters at some level, but I suspect my level and reason differs from others'. Host, I'm ignoring your post now because you refuse to stick with the topic. You simply assume things and then berate me for not signing on to your assumption. That's not what this thread is about.

02-16-2008, 08:33 PM	#21 (permalink)
loquitur Junkie Location: NYC	re #13 - mixedmedia, you're right, but that's a measurement problem. I suspect that if you factored that in, the overall numbers would change somewhat, but the overall thesis that consumption disparities are less than income disparities would persist. As I said in the OP, I'm not sure that consumption is the relevant measure of economic well-being as distinct from income, and I'm not sure that income is either. It all depends on what we're really trying to evaluate: what kinds of disparities should we care about, and why. We can't sensibly answer the question of what (if anything) to do about disparities until we figure out why they are important.

02-16-2008, 08:55 PM	#23 (permalink)
dc_dux Location: Washington DC	Unfortunately, one of the best federal websites that lists all the best economic indicators in one place, EconomicIndicators.gov, is being shut down by the Bush administration next week due to "budgetary constraints". Damn...how much does it cost to maintain a website...or why does Bush want to make it that much more difficult to find economic data? __________________ "The perfect is the enemy of the good." ~ Voltaire

02-16-2008, 09:03 PM	#24 (permalink)
loquitur Junkie Location: NYC	Will, I extracted two words from your post - financial happiness - because I think they are very telling. The money isn't what makes you happy; you can't eat money or live in money or drive it. What the money does is let you get things that you think will make you happy. It's a tool or a proxy, it's not an end in itself.

02-16-2008, 09:09 PM	#26 (permalink)
loquitur Junkie Location: NYC	Does that mean that you think happiness is the relevant thing we should be looking at rather than income (even if you could adjust the income by region to make it comparable)?

02-17-2008, 08:00 AM	#29 (permalink)
The_Jazz Asshole Administrator Location: Chicago	Future posts that do not conform to the rules and topics set out in the OP will be deleted. The original poster has the right to set the rules and direction of the thread. Please abide by those, especially since you will expect the same in your own threads. __________________ "They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety." - B. Franklin "There ought to be limits to freedom." - George W. Bush "We have met the enemy and he is us." - Pogo

02-17-2008, 08:26 AM	#30 (permalink)
loquitur Junkie Location: NYC	Will, I'm with you. Even if you stipulate that economic well-being is a relevant measure, neither income nor consumption by itself will capture that concept adequately. But if well-being is what we think is the relevant determinant, then income inequality or perhaps even wealth inequality, is not a particularly important factor. Some people are miserable even with all the doodads in the world, others are happy even in a hut. Different people are different - they have different abilities, different needs, different desires. My own feeling on this is that we should care if people have a roof over their heads, clothes on their bodies and basic nutrition, but not whether they have a home that isn't as nice as someone else's, clothes that aren't as fancy or food that isn't as sumptuous.

02-17-2008, 08:52 AM	#31 (permalink)
roachboy Super Moderator Location: essex ma	but if you want to talk about well-being, then (again) the problem arises of what that means. one could consider well-being as relational, in the sense that a measure of well-being can refer to system criteria. this would imply that the overall socio-economic context matters when you try to think about how particular social positions define themselves. this seems axiomatic. i am bewildered by claims to the contrary. they don't make any fucking sense. it doesn't matter that they are consistent with conservative political views--except in that it functions as a little demonstration--as if any were needed--that those economic views make no sense either. another--which is being argued for in the op, and which continues to be argued for--to the extent that refusing to consider basic questions can be confused with argument---would treat well-being as entirely subjective. this would be the "how do you feel today" index. "are you feeling ok?" "how many of you feel ok?" these are fundamentally different. without stipulating "relative to what" any measure is meaningless. and this before you get to the rat's nest: (a) how you'd go about measuring "well-being"--which is self-evidently linked to how you define the term... and even worse (b) how you'd go about distinguishing "well-being" from a reflection of ideological factors. by the last point, i basically mean is--for example---if we live in a consumer culture in which every commodity is pitched at potential buyers as a gateway to happiness at one level or another, then an overall effect of the range of such pitches is to imply--continually--that you, the consumer--are happy--but in such a way that this happiness can be perfected and that perfectedness is always one commodity away--that this opens onto an infinite series is irrelevant. but you see the problem: well-being can be a function of what an old french communist party intello-type called interpellation: that is of the way in which you, spectator, are positioned by the way in which data that passes through a particular instituted space (advertising and its relay systems). so the sense of well-being can measure nothing more than the subjective sense of adjustedness to norms which are derived from the cumulative effect of advertising--in which case an index can measure nothing meaningful beyond the efficacy of advertising. this loops back around onto the question of what you think economic data is supposed to do. if you expect it to provide an accurate image of the system, then "well-being"--particularly a subjective notion of it--is close to worthless. but if you think economic data is an extension of political ideology, then it can fit right into the affective circle-jerk at the center of conservative economic theory--and this because data about the actual world is secondary for most of us--the folk who exercise power may or may not need it--but you and i definitely dont need it. __________________ a gramophone its corrugated trumpet silver handle spinning dog. such faithfulness it hear it make you sick. -kamau brathwaite Last edited by roachboy; 02-17-2008 at 09:05 AM.. Reason: snarkiness removal machine

02-17-2008, 03:15 PM	#33 (permalink)
loquitur Junkie Location: NYC	If the relationship of money and well-being or happiness is tenuous, why should we care as much as we do about inequalities of money? Above a certain floor of physical need, everyone's needs and desires - and satisfactions - are different.

02-17-2008, 04:14 PM	#35 (permalink)
mixedmedia has all her shots. Location: Florida	What the hell does one's happiness have to do with their ability to pay the rent, the power bill, the car payment, etc.? The crux of income equality is not, 'oh, poor Mr. Jones' car isn't nearly as nice as rich Mr. Potter's. Poor Mr. Jones.' It's 'poor Mr. Jones is having to make the choice this month between paying his car payment and feeding his kids while rich Mr. Potter doesn't even have to pay for his car (or his gas or his car washes or his car repair, for that matter) because it's part of his 'income.' If people can't even conceive that the problem is not not being able to buy the nicest things, but in fact not being able to afford to even subsist within the societal framework that has been provided for us without making hard choices every month then you don't have any business having this discussion. No material things do not buy happiness. And not being able to pay your bills every month does not necessarily rob you of happiness. Therefore 'happiness' as a factor in determining the fairness of the ever-widening income disparity in this country is a moot point. And a frigging weird one, too...in my opinion. __________________ Most people go through life dreading they'll have a traumatic experience. Freaks were born with their trauma. They've already passed their test in life. They're aristocrats. - Diane Arbus PESSIMISM, n. A philosophy forced upon the convictions of the observer by the disheartening prevalence of the optimist with his scarecrow hope and his unsightly smile. - Ambrose Bierce

02-17-2008, 08:11 PM	#37 (permalink)
loquitur Junkie Location: NYC	Actually, MM, if you look at what I was saying, I was positing that there is a level of income below which we should be concerned about the person. In a rich society like ours everyone should have access to basic nutrition, clothing and shelter. But if a person's basic needs are taken care of, then no, I don't think income inequality in and of itself is a problem. At some point, railing against the "rich" is just plain and simple envy, which is a poisonous emotion, more for the person who has it than that person's target. And then there is the question of how you define "rich" - I have yet to get a coherent definition from the redistributionists that amounts to anything other than "someone who has more than I do." And bear in mind that that works both ways: there are people who have less than you who would want some of what YOU have, too. To them, YOU'RE rich. Whatever principle you might articulate to justify taking stuff away from people who have more than you merely because they have it can also be used to justify taking stuff away from you. Where I'm going with this is here: at least in this country, simple inequality of income in and of itself is not a bad thing, unless the inequality came about because of theft or some other kind of bad conduct. If you're talking about ancien regime France, or Tsarist Russia, with a hereditary and useless aristocracy, that's one thing. But that's not this country. Most wealth in this country is earned. Yes, there is a luck element - there always is - but it doesn't explain all the disparities even remotely. I have yet to hear an explanation of why simple inequality of income, in and of itself, is something we have to somehow "fix", when there are so many other unequal endowments people have that no one seems to be interested in fixing. Some people happen to be very good at making money. Other people, like me, are good at other things. So?