Inequality in America

Potemkin Village
Potemkin Village

Inequality in America

Read the numbers below and see just how staggering inequality has become over the past few years. It’s a rigged game and it didn’t have to be this way. Globalization is a force but these changes are the result of tax policies and trade deals not to mention government guarantees for banks and other financial institutions. Manufacturing has become a cheap bargaining chip to open foreign markets to American drug patents and copyright protections for the motion picture industry.

Basic business ethics would suggest that destroying your customer base is both unethical and foolish.

James Pilant

Inequality | Real-World Economics Review Blog

I am preparing a talk on inequality here in America, and so have been re-reading the Piketty and Saez work. Amongst the more eye-opening facts I have come across is the assertion, by Saez, that the surge in the top 1% incomes is so large that the growth of the bottom 99% amounts to only half the average [mean].

Think about that for a moment.

It would be like walking into a room full of people two feet tall with one thirty footer in the corner. The mean average is meaningless in such circumstances. We are all taught that in statistics class, but to come across such an egregious example in a dataset as large as all US tax returns is astonishing.

Not only is this an alarming fact, but to portray it adequately on a chart is difficult to do. The line representing that 1% doesn’t fit well with the 99% because any scale you use cannot easily accommodate such extremes.

When I chat with people about the topic I realize that most have no clue as to how skewed and screwed up the economy now is. Even when they start to comprehend they retreat into a kind of ‘it doesn’t affect me’ denial. The fact seems to be that most people want to cling onto the mythological image of America they carry with them, perhaps because confronting the reality we have made for ourselves means accepting unpleasant and disturbing facts.

Yet they’ve all been hurt by what happened.

via Inequality | Real-World Economics Review Blog.

From around the web.

From the web site, Rethinking Inequality.

Rising economic inequality in Canada and other advanced industrialized states is a phenomenon much discussed by the media in recent years: indeed, income and wealth inequality have reached historic highs in the U.S. — where the top 1% owns nearly 50% of the wealth — as well as Canada, where the top quintile now controls 70% of the wealth and earns 44% of all employment income.  The precise impact of this rising inequality has become an important subject of study and intense debate among economists, sociologists, social epidemiologists, and urban studies scholars; chief among the possible consequences of inequality they explore are those on public health, economic growth, mobility, levels of social trust, educational opportunity, and crime rates.

Normative reflection on rising economic inequality by moral and political philosophers and theorists has, by contrast, focused on broader, more foundational questions: Which aspects or forms of equality are most important for a just, decent society, and which are comparatively insignificant? Are equal respect and political equality compatible with a high degree of social and economic inequality? And on what grounds might a society strive to reduce inequality, and at what costs to citizens’ social, economic, and political freedoms?