Sunday, July 18, 2004
Confronting a Meme--and a Question for Conservatives
Here's Thomas Frank, author of "What's The Matter With Kansas," purveying a common lefty meme for the Los Angeles Times.
Well, Thomas, perhaps the reason it's not so often commented upon is because it's so easily falsified.
The rest of the article, fortunately for Frank, is on somewhat firmer footing.
For instance, the Gini coefficient--a statistical device which measures economic equality or inequality--has been floating steadily skyward over the past three decades.
The Gini coefficient is a number between 0--indicating everyone in the society has an equal level of income--and 1, indicating perfect inequality. One person has everything, everyone else has nothing.
In 1971, the Gini Coefficient for income was 0.399. In 2001 the Gini coefficient was 0.466.
This is very much different from a Gini Coefficient for assets. An increasing Gini coefficient for assets could be explained by the secular bull market in stocks which existed between 1982 and 2001. Stocks do not generally produce income. Indeed, the income portion of stock returns--the dividend--was a fraction of 1971 levels.
Yields on Treasuries are also near historic lows. This would tend to lower the income Gini coefficient, since the very rich can hold large portfolios of Treasuries, and therefore generate more income from their financial assets.
10 Year treasuries are hovering around 4% now. That's less than half of their levels from the late 1970s and early 80s, when they were well north of 10%.
Yet despite the sharp reduction in the availability of portfolio income--an environment which should be overwhelmingly favorable to lowering the Gini and increasing equality of income across the board, the Gini coefficient continued to rise.
No, Dems, you don't get to blame Republicans. Because the fact remains that the Gini rose under Carter, it rose under Reagan. It rose under Newt's House, and it rose under Tip's. It rose under a Democratic Senate, and it rose under a Republican Senate.
Ok, so maybe a huge amount of stock holdings have been shifted into bonds which now generate income for those at the top end of the totem pole.
But honestly, conservatives--can a relentless increase in income inequality possibly be considered a good thing, in the long run?
If not, what's the fix?
My guess is any real and long term solution will involve radical education reforms.
Splash, out
Jason
WASHINGTON — That our politics have been shifting rightward for more than 30 years is a generally acknowledged fact of American life. That this movement has largely been brought about by working-class voters whose lives have been materially worsened by the conservative policies they have supported is less commented upon.
Well, Thomas, perhaps the reason it's not so often commented upon is because it's so easily falsified.
The rest of the article, fortunately for Frank, is on somewhat firmer footing.
For instance, the Gini coefficient--a statistical device which measures economic equality or inequality--has been floating steadily skyward over the past three decades.
The Gini coefficient is a number between 0--indicating everyone in the society has an equal level of income--and 1, indicating perfect inequality. One person has everything, everyone else has nothing.
In 1971, the Gini Coefficient for income was 0.399. In 2001 the Gini coefficient was 0.466.
This is very much different from a Gini Coefficient for assets. An increasing Gini coefficient for assets could be explained by the secular bull market in stocks which existed between 1982 and 2001. Stocks do not generally produce income. Indeed, the income portion of stock returns--the dividend--was a fraction of 1971 levels.
Yields on Treasuries are also near historic lows. This would tend to lower the income Gini coefficient, since the very rich can hold large portfolios of Treasuries, and therefore generate more income from their financial assets.
10 Year treasuries are hovering around 4% now. That's less than half of their levels from the late 1970s and early 80s, when they were well north of 10%.
Yet despite the sharp reduction in the availability of portfolio income--an environment which should be overwhelmingly favorable to lowering the Gini and increasing equality of income across the board, the Gini coefficient continued to rise.
No, Dems, you don't get to blame Republicans. Because the fact remains that the Gini rose under Carter, it rose under Reagan. It rose under Newt's House, and it rose under Tip's. It rose under a Democratic Senate, and it rose under a Republican Senate.
Ok, so maybe a huge amount of stock holdings have been shifted into bonds which now generate income for those at the top end of the totem pole.
But honestly, conservatives--can a relentless increase in income inequality possibly be considered a good thing, in the long run?
If not, what's the fix?
My guess is any real and long term solution will involve radical education reforms.
Splash, out
Jason
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