What don't you understand about it?
I don't understand how the counterfactual means one group 'took' from another group.
It is a pretty straightforward proposition. If the income distribution that existed in 1975 in the US existed today the average family income today would be more than 100,000 dollars a year instead of 60,000 dollars a year.
This means that the total income generated by the economy has gone more to the upper earners instead of being distributed more equably as it was in 1975. Over the 45 years, this has totaled 50 trillion dollars in wealth that would have been more equally distributed to the 99% went instead to the 1%.
I understand that. It is arithmetic. I am asking a question about the narrative. In what sense did the top 1% 'take' the wealth from the bottom 90%?
You understand the arithmetic but you don't understand why the arithmetic demonstrates that money was taken from one group to another group? Are you being intentionally obtuse?
If I could be allowed to be generous and to move this along I would say that your point was that there is no evidence that the money was intentionally taken from one group to another group. That the money flowed to the already rich because of some unknown factors, not from any human actions or intent. This is a common argument from people defending the current income inequality, as you seem to be doing.
Is that what you meant?
The answer to this argument is that things happen for a reason and when money is involved those reasons usually involve intentional human actions.
I would further ask, do you believe that the growing income inequality is desirable? For the economy? For the 99%? For the ongoing democratic governing experiment in the US, Anglo and European democracies?
If the Gini coefficient between 1975 and today were exactly the same, does that imply that no money was 'taken' by the top 1%? Or what if inequality had become smaller? Would that imply that the top 1% had 'given' wealth to the bottom 90%? Would it imply that the bottom 90% had 'taken' the wealth from the top 1%?
Answered above. Again, when things happen involving money it usually is intentional.
This is the largest threat to capitalism in the US. It is a much larger threat than socialism, what American conservatives call any social democrat proposals like universal health care not run by Wall Street for their benefit. It is the reason that so many people are dissatisfied with the government and a large reason that so many of them voted for the pseudo-fascist Donald Trump and the party that is ironically responsible for the economic policies that created the income inequality, the Republican party.
You mean: created the
additional inequality, over and above the inequality that existed in 1975? It's worth noting that the summary itself does not attribute it to Democrats or Republicans. Indeed, it could hardly be said that Republicans have had a monopoly on power from 1975.
Yes, the additional inequality. Capitalism requires a certain amount of income inequality. It provides the incentive to work and to innovate.
The degree of inequality that is required and tolerated is decided by whom so ever oversees the economy. In past times it was the tribal chief, the clan leaders, and the kings. Today it is decided by the democratically elected government through the economic policies that it sets, the rules and regulations that it uses to control the economy.
And yes, the government has to set the rules for the economy to operate under and the government has to enforce the rules. The government has to impose rules and taxes that increase the prices of goods and services to reflect the costs external to the direct costs of production. Things like making sure the price is burdened with the costs of pollution abatement to preserve the health of the population. To preserve competition in the market. To assure a measure of safety and efficacy of the product.
The playbook of rules and regulations that have caused the additional income inequality over the last forty+ years were written by the Republicans in the US, but have been followed in large degree since by the conservative Democratic administrations, i.e. Clinton, or were enforced by Republican control of Congress.
My problem with the article (and the research underpinning the article) is the unexamined assumption that changes in inequality mean some group has 'taken' from another group.
As you keep saying.
I try not to debate the meaning of common words. Do you have a word that better described what went on when the income inequality increased than "take."
The article also implies, indeed is built on the idea, that the total economic output right now would be the same if the (unnamed) policy changes that helped created further inequality had not been implemented since 1975, and presumably alternative policies that kept inequality at the same level had been implemented instead.
But why should I, or you, believe that to be true? Indeed, what if the worsening inequality decreased total economic output? What if it increased it?
To believe that worsting income inequality increased total economic output you would have to define another definition of economic output than GDP, which has grown about 1% less per year over the last forty years or so of rising income inequality compared to the period of lower income inequality that proceeded it.
There is a marked difference in what the rich do with any increase in their incomes and what the non-rich do with theirs. The rich by and large save any additional income that they receive, in stocks and bonds, in bank accounts, in Treasury bills, etc. Money that is saved is money that is not circulating through the economy. The non-rich are more likely to spend any additional income that they receive.
You would have believe that the economy is driven by savings not by spending, which is counterintuitive. Corporations don't invest in new products and new production facilities because more money is being saved, they do it because there is more money in the hands of consumers that will be spent on the products. And of course, it is wages that put money into people's pockets.
Or you have to believe that our current economy is being constrained by a lack of money for corporations and other businesses to invest. A certain delusion in the current economy of record profits and a fiat money system that has virtually unlimited amounts of money to lend for low risk, worthy endeavors.
Certainly, the current income inequality is constraining growth in the economy. Just think, when was the last time that you heard that higher profits would produce run away inflation? Isn't it always been ever higher wages that have been accused of producing higher inflation? And what is inflation? It is when the demand for goods exceeds the supply of goods. It is the product of excessive growth in the economy.
