Income Gap Widens

[the_idle_threat]

Re: Income Gap Widens

On the contrary---as I stated above---including capital gains would almost certainly narrow the gap between top and bottom incomes, going from the period ending in 2000 to the most recent period ending in 2006, since capital gains were almost certainly a lot lower in the later period. .................................................. ...............................................

No valid conclusions can be drawn from it, except that people will believe anything if it supports their world view.

Very thoughtful post, and a fine use of critical thinking to arrive at your own conclusions instead of just blindly accepting what was written.

I'd only add this. Who cares about the "gap"? My financial performance relative to Bill Gates is hardly a measure of my financial ability to survive a recession. I should be comparing my income against what it was, and what it will take to survive a recession. I consider this article inflammatory, and designed to galvanize those who blame the wealthy for the current situation.

Thanks Scott. I agree that the "gap" is irrelevant. People can't improve their own financial situation by focusing on what other people have. It's especially unproductive to waste time banging on the "rich" when trying to improve things for the poor. It just sows discord and solves nothing.

Of course, the Economic Policy Institute, which authored this study, thinks the income gap is a HUGE problem, and that's why they have incentive to lie about it in a big fat "research" report.

[Scott Campbell]

Was your stuff ruined?

Thankfully, I had packed table coverings on the top of each box....they were VERY wet....but protected everything that was under them.
What bothered me the most about the situation was the 'nonchalantness' by the center's managers...........you know, the shrugged shoulders 'nothing we can do' crap.

Well at least your stuff was ok. I think I would have been bothered more by by the bill for their "work".

[Harlan Huckleby]

especially if you consider why they limited their study to discrete three-year periods rather than considering all years (this is an argument I haven't even made above, but may be even more damning).

They are using the Census data that was available for those three year periods. Census data is not collected continuously. There is no conspiracy. If they had continuous data I expect they would use it.

I understand your resistance to my argument. People don't want to agree with someone who is overbearing and comes across as a fist-pounder.

Well, true enough, you are a prick, this goes without saying. But I wasn't holding it against you.
I think you are smart and knowlegable enough to ask intelligent questions, but not capable of providing intelligent answers. I'm not saying that your criticims are wrong, just that it is not possible to analyze them. You can pretty much throw any intelligent-sounding accusation up against the wall. I don't have the knowlege or time to make sense of them.

This study was published everywhere. If the study is as nakedly flawed as you allege, there ought to be a response somewhere by people who work in the field and know the terrain.

[Harlan Huckleby]

Re: Income Gap Widens

Of course, the Economic Policy Institute, which authored this study, thinks the income gap is a HUGE problem, and that's why they have incentive to lie about it in a big fat "research" report.

Of course you are not approaching this from an ideological viewpoint.

[LL2]

You are worried about the income gap getting wider, but you should also worry about losing your desk job.

You have 7 years to learn Mandarin

Forget cheap imports. China's rise will soon be a force on Wall Street and Main Street and in Silicon Valley.

By Geoff Colvin, senior editor at large

(Fortune Magazine) -- Back in 2001 when the International Olympic Committee chose Beijing as the site of this summer's games, the event was meant to mark China's debut as a player on the global economic stage. But a recent study by the economist Angus Maddison projects that China will become the world's dominant economic superpower much sooner than expected - not in 2050, but in 2015.

While short-term investors are already cashing in on China's growth by playing the global commodities boom, smart long-term thinkers are contemplating what happens when China matures from an exporter of cheap goods to a competitor in sectors where the U.S. is dominant - technology, brand building, finance. China has almost wiped U.S. makers of low-value items like toys and socks, but by 2015 it may threaten Apple (AAPL, Fortune 500), J.P. Morgan Chase (JPM, Fortune 500), and Procter & Gamble (PG, Fortune 500). It will increasingly influence the S&P 500 and the mutual funds in our 401(k)s. So it's worth looking at how that will happen, what it means, and what anyone can do in the seven years before the baton is passed.

Just using the exchange rate to convert China's GDP into dollars isn't helpful in comparing the two economies, because China controls its exchange rate; by that method, China's economy might not pass America's for decades. Exchange rates apply only to tradable products and services; they aren't very useful in valuing nontradable goods in a country like China that is much poorer than the United States. So we need some way to compare the real value of China's economic output with America's, and economists have developed one. It is called purchasing power parity.
For example, Chinese construction workers earn a whole lot less than Americans do, yet they can still build top-quality buildings. If we used the exchange rate, the value of a new skyscraper in Shanghai would count much less toward China's GDP than an identical building in Chicago would count toward America's, which makes no sense. Purchasing power parity corrects the problem.

Will China take the crown?

Angus Maddison's forecast (which uses purchasing power parity) isn't built on outlandish assumptions. He assumes China's growth will slow way down year by year, and America's will average about 2.6% annually, which seems reasonable. But because China has grown so stupendously during the past decade, it should still be able to take the crown in just seven more years.
If that happens, America will close out a 125-year run as the No. 1 economy. We assumed the title in 1890 from - guess who. Britain? France? No. The world's largest economy until 1890 was China's. That's why Maddison says he expects China to "resume its natural role as the world's largest economy by 2015." That scenario makes sense.
China was the largest economy for centuries because everyone had the same type of economy - subsistence - and so the country with the most people would be economically biggest. Then the Industrial Revolution sent the West on a more prosperous path. Now the world is returning to a common economy, this time technology- and information-based, so once again population triumphs.

So how should we make the most of our seven-year grace period? For companies: Focus on getting better at your highest-value activities. Just because the Chinese will be fighting you in the same industries doesn't mean you'll lose. (Investors, remember that China bought $3 billion of Blackstone (BX) at the IPO price of $31 last summer, and the firm is now trading at $19.) It only means you'll have to work harder to win.
For individuals: You can avoid competition with Chinese workers by doing place-based work, which ranges in value from highly skilled (emergency-room surgery) to menial (pouring concrete). But the many people who do information-based work, which is most subject to competition, will have to get dramatically better to be worth what they cost. For government leaders: Improve U.S. education above all.

Those are the issues in China's becoming No. 1 that we most need to focus on. And as with so much else in China's recent history, we'll need to worry about them much sooner than we expected.

[Scott Campbell]

Great article. The answer for everyone is pretty much the same whether you're rich or poor - you better be ready to compete.

[the_idle_threat]

Re: Income Gap Widens

I think you are . . . not capable of providing intelligent answers. I'm not saying that your criticims are wrong, just that it is not possible to analyze them. . . . I don't have the knowlege or time to make sense of them.

Does this mean my answers are unintelligible or just that you can't figure them out? Sounds like the latter to me.

Of course, the Economic Policy Institute, which authored this study, thinks the income gap is a HUGE problem, and that's why they have incentive to lie about it in a big fat "research" report.

Of course you are not approaching this from an ideological viewpoint.

I'm saying they have reason to be biased (which is readily apparent if you look at their website) and everyone knows statistics can lie. They're not going to produce a costly study that fails to reinforce their worldview.

It's true that I disgree with their worldview, but the "ideology" that makes me so adamant about this is that I depise their demagoguery,

[Harlan Huckleby]

Re: Income Gap Widens

I think you are . . . not capable of providing intelligent answers. I'm not saying that your criticims are wrong, just that it is not possible to analyze them. . . . I don't have the knowlege or time to make sense of them.

Does this mean my answers are unintelligible or just that you can't figure them out? Sounds like the latter to me.

I get your points, but I can't weigh them because I don't know enough about the topic. All I can do is speculate, just like you. For instance, you were all head-up about the discontinuity in data, now I'm pretty sure that is just because Census data is discontinuous, and your conspiracy theory is wrong. But neither of us REALLY know because the answer may be obscure.

It's true that I disgree with their worldview, but the "ideology" that makes me so adamant about this is that I depise their demagoguery,

Again, if their report really is as bogus as you allege, the conservative think tanks would be issuing a response, since the report was so widely distributed.

And BTW, I was only kidding when I called you a prick. You're more of a nutsack type.

[MadtownPacker]

What the hell is a lame ass, non job having scumbag like Harlan doing in a thread about working people???

Dont you peeps know he aint nothing but a trust fund baby, leaching off his families wealth?

This is kinda like sex themed threads. He gets all opinionated about something he doesnt even do any more.

[Harlan Huckleby]

Mad, you've been so sweet to me lately, I was thinking of giving you a little piece of my giant trust fund. Mentioned it to dad's attorney just this morning. You know you are like family to me.


Your tone is very disturbing, I'm having second thoughts.

[MadtownPacker]

Shut your filthy trap!!

You think I would sign some shit from you? Probably would be some kinda indentured servant contract.

[Scott Campbell]

You know you are like family to me.

Low blow.