Matthew Yglesias » Spreading the Wealth Around

Oct 22nd, 2008 at 6:21 pm

Spreading the Wealth Around

This chart from Scott Lilly’s column puts conservative strictures against “spreading the wealth around” in its proper context:

Similarly, when you hear about the evils of EFCA recall that when unionization rates were higher in the first half of the postwar era, overall economic growth was stronger and distributed more equally. But declining rates of unionization have helped create a situation where the richest get most of the pie and there’s less overall pie. Which is fine if you own houses and/or a $150,000 wardrobe but the rest of us would benefit if the wealth was spread around a bit more.

Comments
82

Filed under: Economy, Inequality, Unions

82 Responses to “Spreading the Wealth Around”

Notorious P.A.T. Says:
October 22nd, 2008 at 6:27 pm
Yes, but pretty soon members of that top 1% are going to go around building factories and creating jobs–as rich people are wont to do–and then everyone else will benefit.

Take McCain himself. I’m sure he’d like nothing better than to use his fortune to start businesses, but instead our tax policy forces him to buy 7 houses, 12 cars, and his own plane. Or, something.
Mixner Says:
October 22nd, 2008 at 6:45 pm
Under Bush, the share of income going to the top 5% of households has fallen from 22.4% to 21.2%.

The share going to the top fifth also declined, from 50.1% to 49.7%.

The share going to the middle fifth has increased, from 14.6% to 14.8%

In other words, under Bush the rich have lost income share and the middle-class have gained income share.

Clinton did exactly the opposite. Under Clinton, the middle-class lost income share, and the rich gained income share.

Bush has lowered income inequality. Clinton increased it.
leapsecond Says:
October 22nd, 2008 at 6:47 pm
For those without a calculator, the average household in the top 10% grew 1824 times the amount than the average household in the bottom 90%. That’s simply staggering.
RH Potfry Says:
October 22nd, 2008 at 7:08 pm
It’s a shame that income growth is divided so unfairly.

Oh, wait a second…it’s not divided. It’s earned.
travis Says:
October 22nd, 2008 at 7:12 pm
Matt might want to look at the gini coefficient for the Bush and Clinton years. Inequality has increased only fractionally during the Bush presidency. It increased more during the Clinton years.

Matt also might want to look at the stellar condition of the highly unionized companies in America before advocating greater rates of unionization.

Matt’s too smart to stay inside the liberal bubble for long. After all, Sullivan named a cool award after him. He’ll get out and look around sooner or later.
Ian Says:
October 22nd, 2008 at 7:20 pm
@leapsecond:
Of course people with lots of money have increased their income by more than people with a small amount of money, in terms of gross dollars. Percentage-wise, that’s not necessarily true.
joel hanes Says:
October 22nd, 2008 at 7:30 pm
Mixner, those numbers are so at odds with with everything I’ve read on economist blogs that I have to ask you for a data source, if you please.
cmholm Says:
October 22nd, 2008 at 7:33 pm
Bush has lowered income inequality. Clinton increased it.

It certainly wasn’t a Bush policy to make it so. Income for the top 1% is highly dependent on the price of stocks. Stocks tanked during most of Bush’s first term. 9/11 simply accelerated an existing trend.

Since early 2003 (until now), stocks have been climbing, leading to the result shown in the pie chart.

The top 1% income gains had been decoupling from the rest of the top 5%, and the top 0.1% (30,000 returns) from them.
justinf Says:
October 22nd, 2008 at 7:37 pm
Those top 10% must be working so much harder than the rest of us. Note to self: Stop reading blogs and start working harder!
JonF Says:
October 22nd, 2008 at 7:39 pm
Re: In other words, under Bush the rich have lost income share and the middle-class have gained income share.

Due primarily to the bad economy Bush has presided over.
Mixner Says:
October 22nd, 2008 at 7:41 pm
Mixner, those numbers are so at odds with with everything I’ve read on economist blogs that I have to ask you for a data source, if you please.

http://www.census.gov/hhes/www/income/histinc/h02AR.html

And here’s the Gini ratios:

http://www.census.gov/hhes/www/income/histinc/h04.html

As you can see, the Gini ratio of income inequality increased under Clinton and decreased under Bush.

Income inequality also increased under Carter, by the way.

Gee, the Democrats sure are egalitarian.
Mixner Says:
October 22nd, 2008 at 7:43 pm
Due primarily to the bad economy Bush has presided over.

Ah yes, more faith-based economic analysis. Or did you use your Ouija board this time?
Gordon Gekko Says:
October 22nd, 2008 at 7:55 pm
Solving income inequality through taxation could work but will undoubtedly impose costs on the median income. What Matt needs to do is explain why adopting European style policies won’t create European like conditions? Also rather than continuously posting on how rich the rich are try and explain the trade-offs and benefits of a more equal society. Perhaps you could start by explain how we can return to 1950s conditions (given the advancements in technology and global economic integration) and why we would ever want to.
karrsic Says:
October 22nd, 2008 at 7:56 pm
Mixner said: Gee, the Democrats sure are Socialist.

Fixed.
Kolohe Says:
October 22nd, 2008 at 7:59 pm
Google went public in 2004.

Of that top 1%’s 626 billion, Sergey Brin and Larry Page may account for nearly 5% of that amount by themselves (30 billion).

This may be completely missapplying stats but would be interesting (but still not particularly meaningful) if true.
Gordon Gekko Says:
October 22nd, 2008 at 7:59 pm
And what is this fixation with unions? Unions are only effective when labour intensive industries are uncompetitive and reap large economic profits. Tell us what industries today fit that description?
RY Says:
October 22nd, 2008 at 8:09 pm
No Republican President has ever reduced income inequality. Two Democrats, as noted, did fail to. Income inequality was reduced during all other Democratic Presidencies, some very dramatically. Here is the full data, no cherry-picking, comparing the economy during Republican and Democratic Presidencies:

http://delong.typepad.com/sdj/2008/07/partisan-econom.html

The numbers do not make a case for Republicans as being good for the economy.
Mixner Says:
October 22nd, 2008 at 8:15 pm
Solving income inequality through taxation could work but will undoubtedly impose costs on the median income. What Matt needs to do is explain why adopting European style policies won’t create European like conditions? Also rather than continuously posting on how rich the rich are try and explain the trade-offs and benefits of a more equal society.

Because he’s become a partisan hack. The old Matthew might have engaged in a serious discussion of that kind. The new Matthew is about as concerned with an honest and fair-minded presentation of facts and arguments as a political TV ad.
Noah Says:
October 22nd, 2008 at 8:22 pm
While I’m all for equalizing income growth, I have to point out a logical fallacy here:

“when unionization rates were higher in the first half of the postwar era, overall economic growth was stronger and distributed more equally. But declining rates of unionization have helped create a situation where the richest get most of the pie and there’s less overall pie.”

Logically, this is like saying “Back when I wasn’t taking any medicine, I was perfectly healthy, so this medicine must be causing my illness, and I should therefore stop taking it.”

Sometimes that kind of statement is right, and sometimes it’s 100% wrong, because it’s a logical fallacy.
AlanC9 Says:
October 22nd, 2008 at 8:43 pm
What makes you think Matt would mind European-like conditions?
John McCain: Worse than Bush Says:
October 22nd, 2008 at 9:14 pm
Mixner, does it bother you to be such a hack? The market continually set records under Clinton, which benefited all (including my retirement), but tanked under Shrub (which hurt the rich more). But no one alive thinks Bush didn’t do his best to help the richest, with basically all the tax cuts going to them. The tax cuts just can’t offset how Shrub fucked the economy.
Barack Obama: Worse than Hitler Says:
October 22nd, 2008 at 9:22 pm
The market continually set records under Clinton

Ah yes. If all else fails, change the subject.
lucky Says:
October 22nd, 2008 at 9:39 pm
The market continually set records under Clinton

That’s because after the Democrats got trashed in the ‘94 mid-terms and Dick Morris was called in Clinton governed as a Republican. Pro-business. Free trade. Welfare reform. Tax cuts.

My favorite was when he signed the Defense of Marriage Act and then bragged about it on Christian radio.
Gordon Gekko Says:
October 22nd, 2008 at 10:01 pm
AlanC9,
There is nothing wrong if Matt prefers European like conditions. I am not sure if European countries would be so great without an economic giant like the United States as their trading partner but who knows. I only wish Matt would either admit a decline in median income by perhaps 20% (France) or 17.5% (UK) is worth the benefits (eg. child mortality etc.). Or even better why if America adopts their progressive policies this won’t happen.
Not as stupid as Mixner Says:
October 22nd, 2008 at 10:37 pm
Idiocy from Mixner and a bunch of dimwitted hacks pretending that Bush’s incompetence leading to a massive stock market crash means that he worked to decrease inequity.

Matt, your conservative trolls are some of the dumbest on the internets. It’s as if the presence of uber-moron Mixner attracted the worst and the dimmest.

To the nitwit claiming that Clinton’s stock market record was off topic – no sorry. The top “earners” saw much of their increase because of the market. The opposite has happened under Bush. Clinton’s because of actual policy choices, Bush’s too, but as an unintentional side effect of Republican rule.

To Mixner, nothing. You are beneath contempt and even this much is more than you are worth.

To the moron who thinks the Republicans brought about fiscal discipline. Sorry. Clinton’s tax increase was more powerful than all the Republican whining about crap on the margins. How can we tell? Because Bush also had a Republican Congress and the result was stunning deficits. But don’t let the facts get in the way of your argument.
lucky Says:
October 22nd, 2008 at 10:46 pm
@25 is the dumbest post I have read today.
Glaivester Says:
October 22nd, 2008 at 10:55 pm
Most of the income growth from the dot-com bubble that was destroyed from 2000-2002 was due to artificially inflated stock prices that were in turn due to unsound monetary policy. The stagnation at the start of the Bush term was simply a correction of this.

To act as if the huge stock increase from 3300 to 11,400 under Clinton represented real increases in value, or that it was Bush’s fault that the market went down to 7900 in 2002 is a rather misleading.

Now you can make legitimate criticisms of Bush’s budgetary policies vs. Clinton’s (although I suspect that Clinton would have spent the revenues from the 1993 tax increase on social programs rather than turning the deficit into a surplus if he had not had to wrangle with a GOP congress), but the dot-com bubble bursting is not Bush’s fault.
No Comment Says:
October 22nd, 2008 at 10:57 pm
Similarly, when you hear about the evils of EFCA recall that when unionization rates were higher in the first half of the postwar era, overall economic growth was stronger and distributed more equally. But declining rates of unionization have helped create a situation where the richest get most of the pie and there’s less overall pie.

I agree that we can attribute this change directly to declining rates of unionization. After all, it’s not as though anything else of significance has happened to the economy. Europe and Asia are still recovering from having been destroyed in WWII, our economy is still based on industries like automobile manufacturing and coal mining, we’re still fighting the Soviet Union, and there’s never been any such thing as deregulation, Medicare, or the Internet.
Russ Says:
October 22nd, 2008 at 11:01 pm
Why John McCain’s recent negative “income redistribution” ads fall flat
Mixner Says:
October 22nd, 2008 at 11:18 pm
Oh, Russ, that’s just embarrassing.

I especially love the bizarre definition of poverty as “income less than half of the national average.” So if I live in a country with an average income of $60,000, and I make $29,000, then I’m living in poverty. But if I live in a country with an average income of $10,000, and I make $6,000, then I’m not living in poverty. $29,000 = poverty. $6,000 = not poverty. And that makes sense to you, does it?
Russ Says:
October 22nd, 2008 at 11:26 pm
First, find me a country with an average income of $60,000 and get me a visa!

Second, it makes perfect sense. The country with ten times the average income most likey has ten times the cost of living. Granted, we would all prefer to live in the richer country, but it’s a standard measure that has been used for years.
Mixner Says:
October 22nd, 2008 at 11:37 pm
The country with ten times the average income most likey has ten times the cost of living.

Real incomes adjusted for purchasing power parity vary dramatically between nations. The average real income in Mexico is vastly lower than the average real income in the United States, for example. That’s why so many Mexicans come to the U.S. By your bizarre definition of poverty, all we need to do to completely eliminate poverty is make everyone more or less equally poor. Poverty as you define it has nothing to do with whether you have decent housing, food, clothes, etc. It’s nothing more than a measure of distribution.
Peter Says:
October 22nd, 2008 at 11:52 pm
Quoting:

It’s a shame that income growth is divided so unfairly.

Oh, wait a second…it’s not divided. It’s earned.

—

Sadly, “funny conservative” is now officially an oxymoron.

Now if you will excuse me, I must go curl up into a ball on the floor and weep softly for all the Thurston Howell IIIs who are in danger of having to pay Clinton-era taxes should Obama win. And we all know how much the poor things suffered back then under that evil man.

Seriously, didn’t reality prove back in the 1980s that Tinkle Down Economics was an abysmal failure? Even David Stockman, a key Reagan economics adviser, renounced it.
Russ Says:
October 22nd, 2008 at 11:56 pm
Pure poverty is living on $1 or $2 per day. That is relevant primarily to countries that are not on that list of 30 relatively privileged ones. There may be a very small number of people in Mexico and Turkey who actually survive on that small amount. The average real income in Mexico is so low because it is so inequitably distributed. Mexico’s income distribution graph is bizaare. It has a a large hump at the top and bottom incomes and a long, low straight line between them. It is abnormal to the extreme.

The relative measure of poverty used by the OECD is a measure of access to housing, goods and services among the residents of each individual country. It’s not a measure of what poverty means in, say, Sudan when compared with the USA.

At issue here is the concept that feathering the nests of the wealthy who shuffle jobs from one low-cost center to the next in an attempt to make everyone but themselves equally poor could ever lead to anything good.
nolaboyd Says:
October 23rd, 2008 at 12:01 am
Gekko, has it occurred to you that in Europe they actually work significantly fewer hours and take more vacation time? They voluntarily accept less income in favor of an increased quality of life.
Mixner Says:
October 23rd, 2008 at 12:16 am
The relative measure of poverty used by the OECD is a measure of access to housing, goods and services among the residents of each individual country.

The definition of poverty you’re using doesn’t measure access to goods or services at all. It doesn’t tell us anything about access to food, housing, clothing, medicine, transportation, etc. It is purely a measure of distribution. As I said, under your definition, if everyone were very poor, but more or less equally poor, the poverty rate would be zero. It’s just worthless.
gordon gekko Says:
October 23rd, 2008 at 12:19 am
Nolaboyd,
Wow. Europeans voluntarily accept less income??? Clearly you know nothing of Europes 48 maximum hour work week (France’s 35). There is nothing voluntary about been told you can only work so much. Has it ever occurred to you that some people might like to work hard and increase their utility in other ways (eg. retire early or with more savings)? Or would rather subject everyone to your narrow definition of “quality of life”.
Mixner Says:
October 23rd, 2008 at 12:24 am
nolaboyd,

Gekko, has it occurred to you that in Europe they actually work significantly fewer hours and take more vacation time? They voluntarily accept less income in favor of an increased quality of life.

I’d love to see your evidence for the “voluntarily” part. How do you know they wouldn’t rather have shorter vacations and longer work weeks in return for higher pay? And does this include all the Europeans who are unemployed because employers can’t afford to hire them thanks to mandatory vacations and work hours?
Small Business Guy Says:
October 23rd, 2008 at 12:26 am
I did pretty good during the Clinton economy personally – things got slow under G.W. Bush in 2000 – 2006 for small businesses like mine in the midwest; and I have been in business 16 years.
Russ Says:
October 23rd, 2008 at 12:30 am
The definition of poverty you’re using… is purely a measure of distribution.

Tell that to the OECD, of which both the USA and Mexico are members, who have been using that measure in their efforts to improve living standards all over the world since 1961.

Mixner – What’s worthless is any effort wasted on trying to keep you on topic, while you swat at flies and hope the real issue will just go away. The fact is that the income gap is widening everywhere. If it keeps widening, eventually life is going to get ugly. (Think, French revolution.) I’m sure we would all like to avoid that. A little more constructive thinking would be appreciated.
Mixner Says:
October 23rd, 2008 at 12:42 am
Russ,

Tell that to the OECD,

No, I’m telling you. Why are you using this worthless definition? If all you’re measuring is inequality, why don’t you just call it “inequality,” instead of confusing it with absolute material deprivation by calling it “poverty?”

The fact is that the income gap is widening everywhere. If it keeps widening, eventually life is going to get ugly.

You’ve produced no evidence of that. In fact, I think on a global level income inequality is probably decreasing. Globalization is raising the incomes of hundreds of millions of people in the developing world.

If it keeps widening, eventually life is going to get ugly. (Think, French revolution.)

I’m not seeing any signs of an inequality-induced revolution in America, so I’m not sure why you think this is a concern.
Peter Says:
October 23rd, 2008 at 12:44 am
Quoting #37: Wow. Europeans voluntarily accept less income??? Clearly you know nothing of Europes 48 maximum hour work week (France’s 35). There is nothing voluntary about been told you can only work so much. Has it ever occurred to you that some people might like to work hard and increase their utility in other ways (eg. retire early or with more savings)? Or would rather subject everyone to your narrow definition of “quality of life”.
–

The reason for the 35 hour work week is to spread the work around to as many people as possible. It makes sense.

If someone really wants to put 60 to 70 hours per week into work, they should do what I did: start a business.

OTOH, if I was an employee I’d be happy with 35 hours/week and 4 weeks vacation every year.
geo Says:
October 23rd, 2008 at 12:44 am
People are mixing up INCOME with WEALTH.

It is the concentration of WEALTH – not income – that has been so heavily concentrated under Bush.

hell half the peopel who have tons of wealth have NO income. for example Warren buffett often comments that his money come sin as CAPITAL GAINS on his WEALTH with is taxed much less than his secretary’s INCOME is taxed. ( and he doesn’t like it).

Don’t fall for the republican income straw man argument.
It is far better to have WEALTH (ownership of the nation’s assets that produce capital gains or dividends) than it is to have income which is what guys make when they sweat or think hard and don’t own anything.
Russ Says:
October 23rd, 2008 at 1:00 am
The OECD, World Bank, UNDP, LSE RLAB, the list goes on – their research finds a consistent pattern. You can find the references yourself, Mixner. Income distribution is trending towards a bi-modal curve both between and within countries. The good news is that total global income does steadily increase.

So let them eat cake, eh?

Good night.
Mixner Says:
October 23rd, 2008 at 1:09 am
The reason for the 35 hour work week is to spread the work around to as many people as possible.

Then it’s not working, is it? Which is hardly surprising, since the work hours limit raises the employer’s labor costs and hence reduces the number of workers he can afford to hire. Ditto for the mandatory 6-week vacations.

But I think your claim about the reason for the limit is wrong anyway. The reason for it is not to “spread the work around” but to give workers more time off the job. The price they pay for that is lower incomes and higher unemployment.
Mixner Says:
October 23rd, 2008 at 1:15 am
Income distribution is trending towards a bi-modal curve both between and within countries.

It took me about 30 seconds to find this. Quote:

All in all, says the United Nations Conference on Trade and Development (UNCTAD) in its latest Trade and Development Report, there has been a moderate reduction in the gap between developing and developed countries. “In 1980 the real per capita GDP of developed countries was 23 times higher than that of developing countries, but it narrowed to 18 times in 2007,” the report says.
Neqamuir Says:
October 23rd, 2008 at 1:16 am
I often hear the argument that taxing the rich less will allow them to “go around building factories and creating jobs” but that is just not guaranteed to happen. There is nothing to stop them from building their factory in another country or just putting that money in the bank to accumulate interest or buying lots of houses and renting them out to you. And why would they build a new factory and hire more workers to produce more products if the masses cant afford to purchase more products because they have less money to spend after tax day?

In my opinion, a more likely way to create jobs would be to ease the taxes on the lower and middle classes. Because these people I guarantee would spend that money on products. They need to buy clothes for their kids, a new washing machine, new tires for the car. This is not an option for them, they WILL spend that money. This in turn increases demand for products which causes more sales for Mr factory owner who in turn builds more factories and hires more workers. Wealth trickles up, not down.

Does this logic make sense or am I missing something?
tomj Says:
October 23rd, 2008 at 1:28 am
Has anyone considered the “flat tax” as applied to all the breaks the rich get?

If we had a “flat tax” on income, this would include passive or non-earned income. All income would be subject to FICA, because we have a flat, “just” tax. We would not have an upper limit on FICA and FUTA taxes. If we eliminated mortgage interest deductions, or capped them like FICA and FUTA, who would benefit more?

Truth is the rich get lots of breaks and only get taxed on their “left over” income.

If everyone was taxed at the same rate on the “left overs”, I doubt that many would complain, except the rich.
Peter Says:
October 23rd, 2008 at 2:08 am
The funny thing about the rich is that they never feel that they have enough.
Not as stupid as Mixner Says:
October 23rd, 2008 at 3:38 am
Wow, the idiot “lucky” has no actual response to pointing out just how incredibly stupid the “conservative” arguments are, just insults with no facts to back them. Surprise.

Come on “lucky” show some evidence to support your claim that the gains under Clinton were because he was a Republican. What’s that? You, like the total moron Mixner, have no actual evidence, only assertions that evaporate under the slightest scrutiny? Color me shocked.

What is it about conservatism that requires its proponents be total fucking idiots with no sense of history, argumentation, or basic fucking logic?
Hubert Says:
October 23rd, 2008 at 3:51 am
Factories? Seriously? This is not 1949, and most of our wealthiest citizens are ploughing their investment money into foreign investments, banking, and the like. The nmajority of jobs they’re creating are in India and China.
Never certain Says:
October 23rd, 2008 at 6:02 am
Rich people own far more stocks as a percentage of their wealth, and hence the performance of the stock market has a massive impact on inequality. By the end of the Bush presidency it is possible that inequality will have actually gone down (with the Dow well down on his watch), but if so that should really count as yet another failure by Bush. After all, if you look at his policies there is no doubt that he did his very best to put the government at the service of the rich.

At any rate, what really matters is not inequality, but rather how the middle class have been doing. Under Clinton the middle class has been doing extremely well. Under Bush—a total disaster.
JonF Says:
October 23rd, 2008 at 6:39 am
Re: There is nothing voluntary about been told you can only work so much.

Since European governments (except in Belarus) are democratically elected, “voluntary” is appropriate here. And governments which have proposed changing these vacation and max worktime policies have drawn huge protests. It would indeed seem that Europeans do not want to work as much as Americans do.

Re: Which is hardly surprising, since the work hours limit raises the employer’s labor costs and hence reduces the number of workers he can afford to hire.

???
That makes no sense. I suppose there are some small up-front costs associated with actually hiring an extra person, but how is it more expensive to pay Worker2 X Euros per hour to do the job rather than paying Worker1 the same X Euros per hour? Moreover benefit costs don’t matter since that’s done through government healthcare programs (the employer does have to pay toward those programs, but the cost per work-hour are the same so that too is a wash).

Re: The funny thing about the rich is that they never feel that they have enough.

But it isn’t the rich screaming for these tax cuts– it’s a gang of rightwing ideologues. Guys like Warren Buffet, Bill Gates and George Soros are on record as stating that they do not need or want these tax cuts.
Howard Says:
October 23rd, 2008 at 12:00 pm
Obama’s first, second, and third priority is to get elected. If that means pandering to large numbers of people who want a free ride, he’ll be happy to throw them a few crumbs as a way to get their votes. He will also turn democracy and capitalism on it’s head, and villainize the affluent and successful in our society, in order to rally the masses behind him. With evangelical zeal Obama will convince his followers to replace reason with hope and belief … to blindly follow him … never challenge him … and embrace his words as gospel. In the real, and unforgiving world of economics however, when you immediately gratify everyone by feasting on the goose that lays the golden eggs, the economy looses it’s ability to continue generating growth and wealth. Obama is promising everyone a piece of the pie, whether they helped bake it, or not … but, only in a socialistic, or communist state do the non-contributors demand to share equally in the property that belongs to others. Immediate gratification, and getting something for nothing, is like a drug to the malcontents, but in the big picture, every farmer knows that even if you get hungry, you never eat your seed crop … unless you want it to be your last meal. If Obama gets elected, America will turn into a third world country, with massive government welfare programs, unable to generate jobs for it’s citizens, and unable to compete in the global markets. Keep America safe, free and strong … elect McCain/Palin on November 4th.
Adrock Says:
October 23rd, 2008 at 12:18 pm
At any rate, what really matters is not inequality, but rather how the middle class have been doing. Under Clinton the middle class has been doing extremely well. Under Bush—a total disaster.

Right. And the reason for that has to do with the nature of wealth v.s. income, and the reason why progressive income taxes make sense. It doesn’t matter whether the rich are earning less than they used to. As individuals go up that wealth ladder, you reach certain points where, even if you lost your job, you would still be fine. Wage stagflation is a problem. But its not as big a problem as losing ones job.
Adrock Says:
October 23rd, 2008 at 12:22 pm
@Howard

Good to know we still have the vocal few who love going off the reservation. When you want to come back and be taken seriously, let us know.
Mixner Says:
October 23rd, 2008 at 12:30 pm
JonF,

Since European governments (except in Belarus) are democratically elected, “voluntary” is appropriate here.

Brilliant. In that case, since zoning laws and other laws that impose restrictions on land use also come from democratically elected governments, those restrictions are also “voluntary,” right?

how is it more expensive to pay Worker2 X Euros per hour to do the job rather than paying Worker1 the same X Euros per hour?

It’s not. If each worker does less work, you need more workers for a given amount of labor, and more workers means higher labor costs.

Moreover benefit costs don’t matter since that’s done through government healthcare programs (the employer does have to pay toward those programs, but the cost per work-hour are the same so that too is a wash).

No, the cost is obviously not the same per work-hour. Employee health care costs do not go down simply because the employee works 35 hours instead of 40 or gets 6 weeks of vacation instead of 4. Ditto for all sorts of other benefits. Each employee incurs large fixed costs that are not proportional to his hours of work.
Jack Says:
October 23rd, 2008 at 12:40 pm
Of course if wages are high and remain so due to law or union pressure then companies will be more productive and efficient because they have to be to survive. If companies can simply cut wages instead of increasing productivity, which is usually tougher to do, then less efficient companies will last longer by immiserating their work force. Thus it is absolutely no surprise that the high wage, high unionization era of post war America was very productive and relatively equal in wealth distribution. Only economists, a particularly stupid and evil breed, would be surprised at that.
Jill Says:
October 23rd, 2008 at 1:06 pm
Of course if wages are high and remain so due to law or union pressure then companies will be more productive and efficient because they have to be to survive.

Why are so many lefties not merely ignorant of basic economic principles, but completely bonkers?
mike Says:
October 23rd, 2008 at 1:30 pm
Mixner, please ignore Larry Bartels.

Check him out on Amazon…
tps12 Says:
October 23rd, 2008 at 2:25 pm
The “Clinton and Carter made inequality worse!” rhetoric is disingenuous on its face: from a conservative point of view, income inequality is not recognized as a problem in need of fixing.

Those coming at things from a non-conservative perspective, and who do see a problem with inequality, can engage these arguments if they wish. But they should recognize that their fellow debaters are not interested in a good-faith search for truth in this case.
wkwillis Says:
October 25th, 2008 at 8:35 pm
The pie chart at the top of this post was about the increase in income, not the income, and where it went.
Big, big, difference.
Gary Baumgarten Says:
October 26th, 2008 at 9:59 pm
We’ll be discussing Obama’s “spread the wealth” taxation plan on News Talk Online at 5 PM NY time Monday October 27.

Please go to http://www.garybaumgarten.com and click on the Join The Show button to participate. There is no charge.

Thanks
Drblues Says:
November 3rd, 2008 at 12:37 pm
Just a question- does anyone know, or is there a link to figures that indicate the $ value of the various services one gets in European countries- from college tuition, daycare, health care, higher social security, etc.- which, combined with cash income and prices, ultimately indicates the real standard of living? Also, can one compare what one needs for a secure retirement in different countries? For example, I imagine I have to put away more for retirement (still working at 65) in the US in case I need good medical care, nursing home, etc., whereas in, for example, Denmark, I could relax.
battery Says:
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After reading some of the comments here, I can’t help thinking of Abe Lincoln’s speech about “a house divided cannot stand”. With facts and figures and rhetoric, you can justify almost anything. Naturally, each person will defend their point of view. But we are Americans! What if we could build on our common points? Wouldn’t we be a stronger nation? America is a work in progress. Let’s use our short time on this earth to make our positive contribution to the dream. Let’s respect our differences, and still work in a spirit of cooperation. We weaken ourselves by all the trivial bickering. We should be ashamed for showing such weakness when the whole world is looking for leadership from US!
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Matt Yglesias

Spreading the Wealth Around

82 Responses to “Spreading the Wealth Around”

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