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sidd

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Economic Inequality
« on: August 23, 2017, 02:32:25 AM »
I start this thread to discuss economic inequality, and I shall kick it off a paper by Piketty et al.

1) Distributional National Accounts: Methods and Estimates for the United States, Piketty et al. 2017 available at  http://gabriel-zucman.eu/usdina

The paper concentrates on income inequality in the USA, both pre and post tax, including benefits through redistribution. I attach

a) the upper panel of figure 3 showing the share of national income for the bottom 50%
b) the lower panel of fig 3 showing showing real income for the botton 50% flattening in the late 80s and that it has not recovered from the 2008 recession
c) The lower panel of fig 5 share of the national income going to the top 1%, showing steady increase.

sidd

sidd

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Re: Economic Inequality
« Reply #1 on: August 23, 2017, 02:37:43 AM »
Another paper by saez has figures for wealth as opposed to income, and I attach Figure 12, showing the rape of the bottom 90% by the top 1%. The top 1% in the USA recovered quite nicely since the 2008 recession, while the bottom 90% did not.

Saez  "Income and Wealth Inequality: Evidence and Policy Implications at http://eml.berkeley.edu/~saez/

sidd


TerryM

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Re: Economic Inequality
« Reply #2 on: August 23, 2017, 11:20:59 AM »
sidd
Interesting charts!


I believe chart 12, Family Wealth should have an additional $10,000,000 added to the top 3 numbers in the left y axis, correcting to $14M, $12M, $10M.


I'm always mentally adding broad vertical bands to these charts indicating which party held the presidency at such a time, keeping track of the house might also be helpful in some instances.


Those who were not adults when the Reaganites swept into power may see the reality of "The Reagan Miracle" in your charts. When the prices of raw materials turned deflationary many of us were not prepared & took an unexpected bath. 


Terry

gerontocrat

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Re: Economic Inequality
« Reply #3 on: August 23, 2017, 03:36:25 PM »
The income inequality charts could be entitled "How to get a Trump as President".
A similar chart some years ago in Venezuela could be entitled "How to get a Chavez (and then a Maduro) as President".
How come the very well-off are so dumb?
"Para a Causa do Povo a Luta Continua!"

TerryM

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Re: Economic Inequality
« Reply #4 on: August 23, 2017, 04:54:00 PM »
The income inequality charts could be entitled "How to get a Trump as President".
A similar chart some years ago in Venezuela could be entitled "How to get a Chavez (and then a Maduro) as President".
How come the very well-off are so dumb?
I'm sorry, but I don't get the connection between a far right president and two leftist presidents, nor how all three are bolstered by charts showing how inequality has varied over a number of decades?


I may well be dumb, but I'm certainly not terribly well off, so what am I missing?
Terry

gerontocrat

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Re: Economic Inequality
« Reply #5 on: August 23, 2017, 06:50:31 PM »
Hugo Chavez got elected because the previous regime, awash with oil money, and run by the rich, was too dumb to give some crumbs to the have-nots. The left, and Chavez especially, gave them hope for a better life. Trouble was he spent the oil money twice or three times, and killed the economy.

Trump (once upon a time a Democrat) found a message that resonated with a bunch of have-nots who hated both the establishment republicans and the establishment democrats. They happened also to be also those who believe that big Government is the problem - so naturally are Republicans. Do you remember how Trump prevaricated about signing the Republican oath of loyalty? He only signed it because his constituency was naturally Republican. But the message was "Drain the Swamp".

The charts only show what have-nots are experiencing - being screwed by guys in Armani suits showing off their wealth.

If you look at it through the political perspective of Left vs Right then you cannot see whether a Government is at least trying to improve the condition of the people - "We, the people".

"Para a Causa do Povo a Luta Continua!"

sidd

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Re: Economic Inequality
« Reply #6 on: August 23, 2017, 09:13:15 PM »
The Saez paper has data for many countries. For this kind of research i have found Kuznets, Atkinson and Piketty very useful, and the Piketty, Saez, Zucman team has been prolific. I hve posted some references before, but I shall repost them here as i recall them.

sidd

sidd

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Re: Economic Inequality
« Reply #7 on: September 08, 2017, 12:42:03 AM »
A perceptive article from the guardian about leftward shift of the young in the usa

https://www.theguardian.com/us-news/2017/sep/02/socialism-young-americans-bernie-sanders

sidd

sidd

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Re: Economic Inequality
« Reply #8 on: September 15, 2017, 08:19:57 PM »
Chancel and Piketty on economic inequality in India:

wid.world/document/chancelpiketty2017widworld/

Figures from India are ... difficult. This work is a painstakig reconciliation of several different data sources.

i attach figures showing the share of the top 1% and the bottom 50%

sidd

sidd

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Re: Economic Inequality
« Reply #9 on: September 16, 2017, 05:13:42 AM »
Inequality in lifespan between the top and bottom income in the USA, from a NAP study:

https://www.brookings.edu/blog/health360/2015/09/18/implications-of-the-growing-gap-in-life-expectancy-by-income/

i attach a graph from the study

See also:

https://www.washingtonpost.com/news/posteverything/wp/2017/09/12/i-watched-my-patients-die-of-poverty-for-40-years-its-time-for-single-payer/

" I spent a decade at Mount Sinai Hospital, a not-for-profit hospital for the poor in North Lawndale, a neighborhood of concentrated poverty in Chicago. Sinai cares for a mostly minority population that is mostly uninsured or on Medicaid. In my 27 years at these two safety-net hospitals, not one of my patients received an organ or bone marrow transplant. Yet the organs that fed the transplant centers across the region came from the dying patients in these hospitals.  Our patients — the poorest of the poor — gave, but they never received."

Amazing. We got the dystopic organ market right here.

https://www.nytimes.com/2016/02/13/health/disparity-in-life-spans-of-the-rich-and-the-poor-is-growing.html

"The experience of other countries suggests that disparities do not necessarily get worse in contemporary times. Consider Canada, where men in the poorest urban neighborhoods experienced the biggest declines in mortality from heart disease from 1971 to 1996, according to a 2002 study. Over all, the gap in life expectancy at birth between income groups declined in Canada during that period. And a study comparing cancer survival rates found that low-income residents of Toronto had greater survival rates than their counterparts in Detroit. There was no difference for middle- and high-income residents in the two cities."

The USA is getting rid of poverty by killing the poor.

sidd


johnm33

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Re: Economic Inequality
« Reply #10 on: September 16, 2017, 10:57:36 AM »
It didn't help to have $27T of bailouts to bankers when $8T Could have cleared everyones mortgages. skip to 9:45
https://www.youtube.com/watch?v=nP-8fgP2yLo

GeoffBeacon

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Re: Economic Inequality
« Reply #11 on: September 16, 2017, 01:31:42 PM »
Sidd

"Why can’t we just rob the rich?"

Operationalism was rejected decades ago but economists still cling to it.

Of course Piketty is one of the few post 1930's economists on the side of the angels.

Since the 1930s economists have been influenced by the fallacious rejection of utilitarianism by Lionel Robbins.

Robbins changed economics, which as a "science" does not have moral content, in ways that made our moral judgements, which are not "science", harder to apply. The key point is that "happiness"/"utility" can be perfectly good scientific terms - although when we "happiness" for moral judgement we step outside scientific method. See Lionel Robbins didn’t understand science. Ravens do.

In Thomas Piketty or Robin Hood? I wrote:

In arguing that concentrations of wealth “stirs discontent and radically undermines our democratic values” Piketty plays on the fears of the affluent. We don’t want to be disturbed by discontent and don’t want to believe that we are undemocratic.

A much simpler justification was used by earlier economists, such as Bentham and Mill, that it is right to take from the rich to give to the poor because the rich value what has been taken less than the poor that receive it. This is the utilitarian principle of maximising human satisfaction (or utility or happiness).

Piketty may be avoiding the utilitarianism because of the objections that some moral philosophers can put forward. In the 21st century, few would regard the Roman Games, where the audience delighted in Christians being eaten by lions as morally correct – even if the total pleasure of the crowd exceeded the negative pleasure (the pain) of the Christians. But economics won’t help here either: It has nothing to say. A utilitarianism approach is the best economics can do in the moral field: Not perfect but good enough.

A more depressing reason for Piketty’s coyness may be the legacy of Robbins: the muddled claim that the utilitarian principle was unscientific. A broad moral brush is all that economics can provide, it can’t do better the maximum happiness principle.


Another piece I have written Feeding the geese and robbing the rich asks the question "Why can’t we just rob the rich?" and uses Hume's distinction between theory&facts and internal feelings

The philosopher David Hume (1711-1776) pointed this out a long time ago. My paraphrase of his view is this:

(1) Theory and facts alone cannot drive our actions

(2) Internal feelings drive our actions.

(3) Some internal feelings are “moral sentiments”

I apologise if this comes across as a bit obsessive but I studied Philosophy of Science in the 1960s. Then in the 1970s developed a proposal for unemployment. (Later, made into proper economics by my good friend Kim Swales.) This led me into economics. I was shocked to find they had swallowed Percy Bridgman's view on scientific method, operationalism. The Stanford Encyclopedia of Philosophy says:

Both in philosophy and in psychology operationalism is nowadays commonly regarded as an extreme and outmoded position

Wake up, you economists! I have been waiting for over 40 years to say this.

But I think most economists will have a large dose of Festinger's Cognitive Dissonance when it comes to their operationalist roots. Richard Layard sticks to them even though he is an advocate of measuring happiness.

I feel better after that.

sidd: Thanks for the opportunity.

And, of course, thanks to Neven.
« Last Edit: September 16, 2017, 01:38:09 PM by GeoffBeacon »
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sidd

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Re: Economic Inequality
« Reply #12 on: September 17, 2017, 06:41:23 AM »
Mr. Beacon, 

I  do not read bruselsblog as often as i should. Thanx for the reminder.

That said,i do not see Piketty as an economist as much as an empiricist, laying bare the gutting of the poor. In the large, i find economists devoid of compassion, and I sympathise with many of the current pope's theses, although I am far from religious. The encyclicals are very good, but here are some extracts from the "Economy and Communion" meeting.

http://press.vatican.va/content/salastampa/en/bollettino/pubblico/2017/02/04/170204a.html

"The principal ethical dilemma of this capitalism is the creation of discarded people, then trying to hide them or make sure they are no longer seen. A serious form of poverty in a civilization is when it is no longer able to see its poor, who are first discarded and then hidden."

"Gambling companies finance campaigns to care for the pathological gamblers that they create. And the day that the weapons industry finances hospitals to care for the children mutilated by their bombs, the system will have reached its pinnacle. This is hypocrisy!"

"The economy of communion, if it wants to be faithful to its charism, must not only care for the victims, but build a system where there are ever fewer victims, where, possibly, there may no longer be any."

sidd

GeoffBeacon

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Re: Economic Inequality
« Reply #13 on: September 17, 2017, 09:51:40 AM »
sidd

Wow. That amazes me.

The only reference I can find in the main stream media is a picture of the Pope comforting a crying baby: The Telegraph, Pictures of the Day: 5 February 2017

Nothing of what the Pope said is reported.

Thanks

Geoff
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sidd

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Re: Economic Inequality
« Reply #14 on: Today at 07:46:14 AM »
That the corporate media choose not to report on those papal sayings is not too surprising. They are agencies of power, and a very large part of their function is to distract from systematic inequality engendered by power. In that context of distraction Postman has things to say:

"What Orwell feared were those who would ban books. What Huxley feared was that there would be no reason to ban a book, for there would be no one who wanted to read one. Orwell feared those who would deprive us of information. Huxley feared those who would give us so much that we would be reduced to passivity and egoism. Orwell feared that the truth would be concealed from us. Huxley feared the truth would be drowned in a sea of irrelevance. Orwell feared we would become a captive culture. Huxley feared we would become a trivial culture, preoccupied with some equivalent of the feelies, the orgy porgy, and the centrifugal bumblepuppy. As Huxley remarked in Brave New World Revisited, the civil libertarians and rationalists who are ever on the alert to oppose tyranny "failed to take into account man's almost infinite appetite for distractions". In 1984, Huxley added, people are controlled by inflicting pain. In Brave New World, they are controlled by inflicting pleasure. In short, Orwell feared that what we hate will ruin us. Huxley feared that what we love will ruin us."

Ellul is a useful guide also. But this is getting quite far afield of this thread subject, perhaps we need a new thread about corporate media as agent of power.

sidd