Is This a Problem?
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October 1, 2012 at 8:36pm
My liberal friends on Facebook believe that it is. My feeling is that, as a static data point, it doesn't mean much. More interesting would be to know the trend. It's a political Rorschach test, of course. The liberal view is that things used to be more balanced and now have become skewed. I can't help but think with the rise of home ownership, the opposite must be true. Does anyone know?
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Comments:
Apr '11
Re: Is This a Problem?
I object to the basic premise of the graph: that wealth is 'distributed'. I've gotten in rather heated arguments with a few liberal friends when I stated that wealth is created and earned, not distributed.
May '10
Re: Is This a Problem?
Yeah, my lefty Facebook friends have passed this around too.
That image came out difficult to read, here's the original:
http://www.connectthedotsusa.com/images/FavSlides/JobsWages/WealthPerceptionVsReality.jpg
It's ridiculous. I mean, really, 92% (!!!) of people surveyed believe that the ideal distribution of wealth is where the top quintile have accumulated only 3 times the amount of the bottom quintile? Really?
Are they really looking forward to making three times minimum wage?
Apr '12
Re: Is This a Problem?
My immediate response is how the heck they're calculating wealth.
Does my car count at the value it was when I bought it, the amount I've paid off, the resale value or what the insurance company would pay if it were totaled?
My second response is: gee, some people don't build value, and some do. When you get over the hangover you got from spending your entire pay check the day it gets to you, we can talk some more about this, and how pop songs give really bad economic advice.
Third is to ask if they know anyone that actually is involved with running a business, and how close the supposed value connects to things like "not working 100 hour weeks."
Oct '10
Re: Is This a Problem?
I think if you coupled C.U.'s point with this video, your argument is ironclad. Perhaps include a few points on the shamefulness of envy too.
That video should be a current Republican ad. Why keep trying to reinvent the wheel? Who has ever said it better?
Mar '11
Re: Is This a Problem?
Conflates far too many things to be useful for anything except what it was designed for: gin up demagogic outrage.
May '10
Re: Is This a Problem?
If you look at this graph from the NY Times it shows that wealth "distribution" has been pretty even in the last 80 years:
May '10
Re: Is This a Problem?
And Trace, remind them, as Margaret Thatcher laid out in 1983, there is no such thing as "public money" only "taxpayer money."
Sep '11
Re: Is This a Problem?
Given that the data source for that graph comes from Mother Jones magazine, I think we can view it as somewhat suspect. I would view the NY Times graph shown by E.J. Hill the same way.
Wealth, historically, has been closely related to real property--while there are people with trust funds and massive stock portfolios, the "wealth" of many people is based on ownership of a family farm, family home, or family business (including it's real estate).
If you own real estate that is not mortgaged, guess what? You're part of that top 20% (and very likely part of that top 5%) of sacres aristos that Mother Jones and her contributors would like to put up against the wall. By their figuring, most family farmers in America are the filthy rich against whom We The People should rise up.
Bosh.
When the Left starts marching on the mansions in the Hollywood Hills, and demanding "windfall profits taxes" on NFL cornerbacks, I'll take them seriously.
Nov '10
Re: Is This a Problem?
I say, great. No surprises there -- people have trouble with big numbers.
Now let us do the same thing with taxes! Won't your liberal friends have fun deciding whether it's a good or a bad thing that a majority of Americans regard the top 1% earners as not paying their "fair share" of taxes, while by any sane person's judgement they are paying far more than any reasonable share, while 47% don't have any skin in the game at all.
Track down exact data on tax burden carried by both, construct an almost identical graphic, and make a deal with your friends: For the rest of the election season you will be committed to publicizing both charts every chance they get, if they make the same commitment. Both charts are to be promoted together, without spin: Let the reader decide for themselves what they mean!
Have fun, and when you get the two-chart graphic made up, post it here (in Large format, please) for the rest of us to use.
Jul '11
Re: Is This a Problem?
The facts of life writ large. We are lucky to be in a country where you can move in to that 20% though.
Mar '12
Re: Is This a Problem?
The biggest problem with the graph is the perception that it's a fixed pie (or in this case, bar). The amount that the top 20% have does not come out of the share of the other groups - nor does it prevent the people in the other groups from increasing their share through hard work, sacrifice and God-given talent.
May '10
Re: Is This a Problem?
I've had that same argument with my lib friends and they are convinced that it is, in some substantial way, fixed. And I'm guessing that reflects many people's view. Never mind about prayer in school -- how about some basic economics.
Jul '11
Re: Is This a Problem?
Let's try putting real numbers to this instead of percentages. 10% of the total wealth is $5.3 e12, therefore we can calculate the following:
Are those numbers really that bad in absolute terms? We're talking about accumulated wealth, not income levels, which is a function of frugality, industry and age. Frankly, these numbers look good to me. The top 10% are clearly business owners, the next 10% own nice homes, the next 20% own most of their homes.
As somebody in the 4th quintile, I don't have any problems being here. We probably won't expect to break into the next quintile for a decade, but so what? We're working on building our savings while closing on a modest but nice starter home. Life is good!
-E
Aug '10
Re: Is This a Problem?
The so-called "ideal" distribution is hilariously unrealistic. The only way to achieve it is to kill the golden goose, as the best way of "soaking the rich" is to allow them to build, employ, innovate, and invest, with the benefits of such investment (mostly private) coming to us all. A high tax rate causes the upper echelon to either flee the country or seek tax-exempt investments. I would prefer the "rich" to invest in Chrysler or the next Apple rather than cause the demand for municipal securities to skyrocket.
Not to mention the fact that wholesale wealth transference via the tax code is immoral, unfair, corrupting, and un-American.
Aside from causing the destruction of our economy and our national character, the "ideal" distribution would be terrific!
Edited on October 1, 2012 at 8:56pmApr '12
Re: Is This a Problem?
Rorschach test indeed, if you give ambitious people the means and tools to acquire wealth, they will do so.
What this measures is the inclination and ability to acquire wealth by quintile. You can be sure that each quintile will tend to have a different attitude and skill set in regards to wealth.
This kind of graph is very popular with the Marxists and pseudo-Marxists who are trying, with some success, to attract the petty, bitter, and envious in their war against human nature.
Jul '12
Re: Is This a Problem?
They should re-correllate that chart by age. The picture would become much more clear then.
May '12
Re: Is This a Problem?
Dr. Sowell in his highly estimable book Basic Economics, cites sources that actually track income over time. One of them is a 2007 study done by the department of the treasury and is located here. Its worth looking at. As Dr. Sowell mentions, when looking at categories such as quintiles over time, it does not mean the "rich got richer" and the " poor got poorer" it really only means that the statistical category grew, but it does not reflect the real situation of individual people. To look at that is a much more difficult task and that is what the treasury study attempts and shows that there is a great deal of mobility in our country and people go from the bottom quintile to the top quintile all the time, and life at the top is short lived with a high turnover rate.
May '10
Re: Is This a Problem?
Considering that we're moving toward a bananna republic-style kleptocracy where uber-wealthy Leftists like George Soros, Warren Buffet, Teresa Heinz Kerry, etc. get special treatment, and you have to have a "connection" to weave through all the initiative and wealth-killing regulations, and land a taxpayer-funded stimulus grant like Solyndra I'd say it is a problem, only not for the reason that the Facebook Lefties seem to think it is.
Jul '10
Re: Is This a Problem?
Unfortunately that the second biggest problem with the graph. The biggest problem is that it is irrelevant! LIST the people in each segment and you find that they move about - the "top 10%" are not the same people decade over decade.
We are an economically mobile society. We have aspirations, as CandE points out. We all start out at the bottom and work our way up as far as we can go.
What we should be doing with this kind of nonsense is dismissing it as drivel. Laugh at them for being stupid - it will irritate them immensely and change the terms of the debate.
Sep '10
Re: Is This a Problem?
How many people per household in the top 20%? How many per household in the bottom 20%?