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Another socialist myth debunked: inequality has not been rising

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posted on Nov, 29 2019 @ 12:57 PM
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Linky **Since this article is behind a paywall, I'm going to use a lot of quotes, and I hope the mods understand that**

This article, written by those dubious right-wingers at The Economist (that's a joke for the obtuse among us, The Economist is a left-leaning publication), details a number of different ways in which previous estimates of rising wealth inequality have been miscalculated. They often lie on lots of assumptions, and ranges of estimates in which you can pick and choose any number on that spectrum to reach the results you're looking for. No surprise then, that most of our academics, who are leftists, end up with results that say capitalism is evil. When you really do your homework and try to nail down the numbers, though, the picture is different.


Now some economists have re-crunched the numbers and concluded that the income share of the top 1% in America may have been little changed since as long ago as 1960. They argue that earlier researchers mishandled the tax-return data that yield estimates of inequality. Previous results may also have failed to account for falling marriage rates among the poor, which divide income around more households—but not more people. And a bigger chunk of corporate profits may flow to middle-class people than previously realised, because they own shares through pension funds. In 1960 retirement accounts owned just 4% of American shares; by 2015 the figure was 50%.


Wealth inequality is largely unchanged over the last 60 years. That's a stunning admission from The Economist, which, as noted, is a left-leaning publication and routinely features articles about how bad capitalism is, how unfair everything is, how those greedy rich people are sucking up all the money and leaving a smaller and smaller piece of the pie for the rest of us. Oops, not true.

(While somewhat off-topic, that last line is a particularly interesting statistic to me, since when the left tries to claim that the tax cuts have mostly only helped the wealthy, one thing they sometimes try to claim is that these high stock market numbers don't help working Americans. That's simply absurd. Over 40 million US households have IRAs, and at least some of those households will have 2 or more people in them with individual accounts. That's not even counting 401ks and other types of investment accounts. There's got to be well over 50 million Americans invested in the stock market. They're all "the rich?" No, most of them are middle-class Americans, so, in general, gains in the market help vast numbers of middle-class Americans. It's not just the wealthy benefiting.)


Yet precisely because the idea of soaring inequality has become an almost universally held belief, it receives too little scrutiny. That is a mistake, because the four empirical pillars upon which the temple rests—which are not about housing or geography, but income and wealth—are not as firm as you might think. As our briefing this week explains, these four pillars are being shaken by new research.


This, again, is a very interesting line to me because it applies to many issues, not just economics. The idea that an issue is "settled" and accepted by so many experts and non-experts alike stifles new research into the topic. No one wants to step out of line and be ostracized for finding results that aren't in line with the status quo. Sounds kinda like what you're expect in an authoritarian country, but this is actually the state of the Western scientific community right now. Much of the research is done by leftists, with biases, with preferred results. Anyone that has done research knows it is very sensitive to not just what data you seek but how you seek it. For example survey data can be grossly manipulated by the way the questions are worded. This is why polls are so unreliable. This kind of bias seeps its way into what should be more empirical research. Economics is mostly about numbers, so you would think it should be immune to bias, but there are so many numbers and people, with biases, have to pick and choose which numbers to study. Numbers that don't give the results the researchers are looking for are just ignored, as The Economist admits above.


Estimates of inflation-adjusted median-income growth in America in 1979-2014 range from a fall of 8% to an increase of 51%, and partisans tend to cherry-pick a figure that tells a convenient story. The huge variation reflects differences in how you treat inflation, government transfers and the definition of a household, but the lowest figures are hard to believe. If you argue that income has shrunk you also have to claim that four decades’ worth of innovation in goods and services, from mobile phones and video streaming to cholesterol-lowering statins, have not improved middle-earners’ lives. That is simply not credible.


Another example of the gigantic ranges among which researchers can pick and choose what number to use in order to fit their end goal. We see this in lots of fields. How many times have we seen those estimates of how many people the American military has "murdered" over the course of its wars, of course using cherry-picked numbers at the highest ends of all the available estimates in order to paint the most shocking picture possible. And also, another example of how contradictory data is simply ignored by researchers.


The campaign of Elizabeth Warren, a Democratic presidential contender, reckons that the share of wealth owned by the richest 0.1% of Americans rose from 7% in 1978 to 22% in 2012. But a plausible recent estimate suggests that the rise is only half as big as this. (For connoisseurs, the difference rests on the factor by which you scale up investors’ wealth from the capital income they report to the taxman.) This imprecision is a problem for politicians, including Ms Warren and Bernie Sanders, who want wealth taxes, since they may raise less revenue than they expect.


Once again, some of the socialists' favorite numbers rely on cherry-picked assumptions, in this case about how much wealth is off-the-books, on which there is no solid data. They basically have to guess, and of course they guess high enough to make these numbers sound as egregious as they can. Also, note the dates--1978 to 2012. This is another common tactic of the "studies show" crowd. Pick start and end dates that produce the best results for your position. The gun control crowd likes to do this as well. As The Economist notes above, these numbers fluctuate, so by picking dates that start with a downturn and end with an upturn, you make the gap seem larger than it really is. The real number, the one they cite earlier, from 1960 to present, is close to no change.

The wage gap, wealth inequality, what other socialist lies will go down soon? Again, this article is particularly noteworthy because it appears in The Economist. In fact, it's the cover article of the next issue, it's not just buried in the back somewhere by one of their 3rd rate writers.




posted on Nov, 29 2019 @ 01:10 PM
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So I will speak personally, as I’m at work and don’t have time to go look around for stats. But in hospitals I can give a pretty clear example. Prior to 08 the standard raise was 5%. Now from 08 to about 12, none of the hospitals I worked in gave raises at all. And since then raises have come back, now up to 2-3% depending on the hospital. Keeping in mind, that even over all that time, from 08 on, the majority of the hospitals I worked at celebrated each year as they made banner profits. Each years profits eclipsed the last years. And yet, they couldn’t give us raises. So the moral of the story is that companies make record profits by stealing benefits and compensation from the workers.



posted on Nov, 29 2019 @ 01:37 PM
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originally posted by: pexx421
So I will speak personally, as I’m at work and don’t have time to go look around for stats. But in hospitals I can give a pretty clear example. Prior to 08 the standard raise was 5%. Now from 08 to about 12, none of the hospitals I worked in gave raises at all. And since then raises have come back, now up to 2-3% depending on the hospital. Keeping in mind, that even over all that time, from 08 on, the majority of the hospitals I worked at celebrated each year as they made banner profits. Each years profits eclipsed the last years. And yet, they couldn’t give us raises. So the moral of the story is that companies make record profits by stealing benefits and compensation from the workers.


Real wages have indeed been stagnant for years under progressive policies. They're finally starting to rise now that we've freed up the economy. Thanks for bringing that up.


ETA: Also, note that the statistic about corporate profits being at record highs is a useless metric also used by socialists to mislead people. Wages are also at record highs. Both of these numbers are higher than ever because of inflation, not because either is necessarily at the level it should be. The metric you should be looking at is corporate profit margins, which is suspiciously hard to find. My guess would be that that number doesn't paint the right picture, so most researchers ignore it.
edit on 29 11 19 by face23785 because: (no reason given)



posted on Nov, 29 2019 @ 01:40 PM
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a reply to: pexx421

Hmmm I wonder what happened in 08. . .



posted on Nov, 29 2019 @ 01:44 PM
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a reply to: face23785




Another example of the gigantic ranges among which researchers can pick and choose what number to use in order to fit their end goal. We see this in lots of fields. How many times have we seen those estimates of how many people the American military has "murdered" over the course of its wars, of course using cherry-picked numbers at the highest ends of all the available estimates in order to paint the most shocking picture possible. And also, another example of how contradictory data is simply ignored by researchers.



But a plausible recent estimate suggests that the rise is only half as big as this.


I mean, I get what you're saying. But the article really contradicted itself in that part...

Wealth inequality has always been a touchy subject.
Does it exist? Well yes of course. Is it running rampant in America? Nope. It has the strongest middle class in the world right now with the most purchasing power. Access to unimaginable wealth that only some places couldn't even fathom.

I think it's more to the point that yes, wealth has risen, but you need to look at the demographic and ages of where most of that wealth is being held. Late 1970s to mid 2000s, is right where baby boomers started to really rake in the dough, and start to gain the most steam in their careers.

What will happen when the mass exodus of boomer retirement happens.

But, wealth inequality around the globe is far worse then it is in the US.



posted on Nov, 29 2019 @ 01:47 PM
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originally posted by: strongfp
a reply to: face23785




Another example of the gigantic ranges among which researchers can pick and choose what number to use in order to fit their end goal. We see this in lots of fields. How many times have we seen those estimates of how many people the American military has "murdered" over the course of its wars, of course using cherry-picked numbers at the highest ends of all the available estimates in order to paint the most shocking picture possible. And also, another example of how contradictory data is simply ignored by researchers.



But a plausible recent estimate suggests that the rise is only half as big as this.


I mean, I get what you're saying. But the article really contradicted itself in that part...



It actually doesn't. I explain that discrepancy in the next paragraph. Give it another read.



posted on Nov, 29 2019 @ 01:47 PM
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The campaign of Elizabeth Warren, a Democratic presidential contender, reckons that the share of wealth owned by the richest 0.1% of Americans rose from 7% in 1978 to 22% in 2012. But a plausible recent estimate suggests that the rise is only half as big as this. (For connoisseurs, the difference rests on the factor by which you scale up investors’ wealth from the capital income they report to the taxman.) This imprecision is a problem for politicians, including Ms Warren and Bernie Sanders, who want wealth taxes, since they may raise less revenue than they expect.


If either of those two jacksnips get elected to office.

Your screwed.

Homes,and 401ks is the middle class's main source of networth.

Saving and investing is what the middle class use to do, but now so many have been brainwashed against them it's pathetic.

And other thing.

Pay attention to how they figure wealth.

They leave a snip load out of their 'calculations'.



The campaign of Elizabeth Warren, a Democratic presidential contender, reckons that the share of wealth owned by the richest 0.1% of Americans rose from 7% in 1978 to 22% in 2012. B


Money makes money. You invest you will make it too.

And you can also lose money people found that out the hard way in the so called financial crisis.

So any tax schemes like Warren and Sanders have is literally a house of cards.



posted on Nov, 29 2019 @ 02:13 PM
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a reply to: face23785

Are you suggesting that these socialist economists or what ever are just making up random stats?
And they are the only ones who do this?



posted on Nov, 29 2019 @ 02:23 PM
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i don't buy it. from where i'm sitting the poor are getting ever poorer as the number of million and billionaires reaches record levels.



posted on Nov, 29 2019 @ 02:23 PM
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a reply to: face23785


In many ways the failure is real. Opportunities are restricted. The cost of university education in America has spiralled beyond the reach of many families. Across the rich world, as rents and house prices have soared, it has become harder to afford to live in the successful cities which contain the most jobs (see Free exchange). Meanwhile, the rusting away of old industries has concentrated poverty in particular cities and towns, creating highly visible pockets of deprivation.


From your article. If you right wingers ever posted an OP without misrepresenting what it says I’d probably die from shock. A lot of times I don’t think it’s intentional though. You all have been conditioned to view everything in a way that forces you to only acknowledge the parts that validate what you already believe.

You can try to argue “but, it’s also says this...” but none of that matters. Because the the first sentence states how real the failure is.

Wealth inequality is huge. One misrepresented magazine article doesn’t change what’s going on in the real world.



posted on Nov, 29 2019 @ 02:27 PM
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a reply to: face23785

The economist isn't a left leaning publication.

Certainly not when it comes to economic policy.
edit on 29-11-2019 by ScepticScot because: (no reason given)



posted on Nov, 29 2019 @ 02:36 PM
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originally posted by: RoScoLaz5
i don't buy it. from where i'm sitting the poor are getting ever poorer as the number of million and billionaires reaches record levels.


So those new million and billionaires appeared out of thin air? No, they are former working-class people who made it. There are more first-generation millionaires in the US than ever. Economic mobility is easier than ever, unless you're the type that just wants to sit on your ass and wait for the government to give it to you.
edit on 29 11 19 by face23785 because: (no reason given)



posted on Nov, 29 2019 @ 02:39 PM
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I found this gonna give it a read later. Seems be on the same track as ops link. Maybe it's the same?

www.cbpp.org...



posted on Nov, 29 2019 @ 02:44 PM
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originally posted by: underwerks
a reply to: face23785


In many ways the failure is real. Opportunities are restricted. The cost of university education in America has spiralled beyond the reach of many families. Across the rich world, as rents and house prices have soared, it has become harder to afford to live in the successful cities which contain the most jobs (see Free exchange). Meanwhile, the rusting away of old industries has concentrated poverty in particular cities and towns, creating highly visible pockets of deprivation.


From your article. If you right wingers ever posted an OP without misrepresenting what it says I’d probably die from shock. A lot of times I don’t think it’s intentional though. You all have been conditioned to view everything in a way that forces you to only acknowledge the parts that validate what you already believe.

You can try to argue “but, it’s also says this...” but none of that matters. Because the the first sentence states how real the failure is.

Wealth inequality is huge. One misrepresented magazine article doesn’t change what’s going on in the real world.


"None of the actual data matters, only the emotional opening statement that tries to save face with those of us who have been lied to about this for years."

Pretty much proves the entire point of the article. You believe the falsehood so thoroughly that no one dares contradict it. They did, and you can't even see that part. All you saw was their disclaimer on the front end. Notable that you didn't even attempt to respond to any of the data presented. Sorry your world got shattered. It'll all be okay, trust me.


originally posted by: ScepticScot
a reply to: face23785

The economist isn't a left leaning publication.

Certainly not when it comes to economic policy.


You may be thinking of The Economist of old. Almost every article has some left slant these days, including economic ones. I used to pay more attention to it years ago when it was more centrist. I've only been reading it recently because one of my left-wing professors wants us to review articles from it for one of my classes. It has definitely shifted left.



posted on Nov, 29 2019 @ 02:46 PM
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I don’t think this is the case. Tax schemes like warren and sanders. You mean like going back 50-60 years ago where education and healthcare were largely govt funded?

At any rate, when it comes to wealth the bottom 90% own 20% of the nations wealth. The bottom 70% own zero. Now that top 10%, 90% of that group owns 40% of the nations wealth. That last top 1% owns 40% as well.

Anywho, categorically our current society defies the op. Largely gone or leaving are the majority of middle class manufacturing jobs. Our only growth sectors are fire sector, largely finance and tech (software).

Which means the vast majority of our workforce have transitioned to low pay and benefit, service type jobs. Which will be further hit hard with automation coming to trucking and floor sales over the next decade, which will be a huge hit to people in those fields as well.

The simple truth is that, whatever you think the statistics are saying, middle class jobs are being replaced with low wage jobs. Half the working nation (at a time where workforce participation is quite low) makes under $18 an hour. Are those people all single, kids, living at home? Not likely. Don’t know about you, but $18/hour, for a single person, is far from “middle class”. It’s a bit over the official definition of poverty, but retains the majority of the negative consequences of that poverty, while being able to get none of the help.

Now that’s 50% of the working population. Which means that greater than 50% of our actual whole population are earning or being supported by those that earn, wages barely more effective than poverty.

As to those boomers. Well, they may have been able to afford a lifestyle while they were working. But fully 50% of them have almost nothing saved for retirement. Which is bad news as they oversaw the destruction of pensions. The next 10 percentile have less than 50k saved up. Not near enough. Only 20% have 199k or more saved in 401k for retirement, which means that 80% of those at retirement age now either will not ever retire, or will be retiring into poverty. And those that DO have enough saved to retire (estimated at a million dollars in 401k for stable retirement) are only one financial crisis away from losing a good chunk of it, and being forced out of stable retirement. That’s one serious accident, illness, injury which can come at any time, or one economic crash, which we can expect in the next year or so.



posted on Nov, 29 2019 @ 02:54 PM
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a reply to: pexx421

Just curious, your statements that $18/hr for a single person isn't middle class is based on what state's standard of living? I live comfortably in Pennsylvania on much less than that. Not every state has sky-high cost of living. This shows a very surface-level understanding of economics in the US. Blanket statements like that simply don't work when you're talking about a country like the US. Same with the people who insist the whole nation needs a $15 minimum wage. You'd be living in poverty on that wage in some cities in California, and in some states in the south that wage would destroy the economy. Across-the-board statistics are as useful as across-the-board policies, which is to say not useful at all.



posted on Nov, 29 2019 @ 03:07 PM
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originally posted by: face23785

originally posted by: RoScoLaz5
i don't buy it. from where i'm sitting the poor are getting ever poorer as the number of million and billionaires reaches record levels.


So those new million and billionaires appeared out of thin air? No, they are former working-class people who made it. There are more first-generation millionaires in the US than ever. Economic mobility is easier than ever, unless you're the type that just wants to sit on your ass and wait for the government to give it to you.


Or it could be that our system has become more streamlined at extracting the wealth that the workers produce, and handing more of it to the oligarchs, and owners, with a smaller slice of the pie going back to the workers.

Yes, you can use money to make money. If you have disposable income, which the vast majority don’t. As to “Wall Street benefits everyone invested, and that’s all the population!!” Bs, the bottom 95% of Americans own less than 5% of Wall Street investments. And often, those “workers savings” are funneled to the garbage and junk bonds, repackaged subprime, to inflate those crap markets, and so the “workers savings” often are the ones wiped out in economic crashes.....while those committing the fraud that caused the collapse get bailed out, with fat bonuses to show that crime does pay. Which really is the message of and stance behind most of our society and culture.



posted on Nov, 29 2019 @ 03:11 PM
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This is one article in one source that makes a claim.

Is that the standard as long as it squares with one set of extremist beliefs?



posted on Nov, 29 2019 @ 03:11 PM
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Double double, toil and trouble.

edit on 29-11-2019 by Gryphon66 because: (no reason given)



posted on Nov, 29 2019 @ 03:17 PM
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originally posted by: Gryphon66
This is one article in one source that makes a claim.

Is that the standard as long as it squares with one set of extremist beliefs?



The idea that the rise inequality is often overstated is fairly reasonable.

The claim that an opinion piece that confirms many metrics of inequality have risen 'debunks' rising inequality not so much.



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