And now for the next question

[mike777]

"Consider life cycle effects. In most Western societies, an individual tends to start life with little or no income, gradually increase income till about age 50, after which incomes will decline, eventually becoming negative. This affects the conclusions which can be drawn from a measured inequality. It has been estimated (by A.S. Blinder in The Decomposition of Inequality, MIT press) that 30% of measured income inequality is due to the inequality an individual experiences as they go through the various stages of l"

 

 

 

"The question whether equality is beneficial for economic growth and progress has occupied the minds of the greatest scientific thinkers as well as policy makers. Evidence from a broad panel of recent academic studies shows the relation between income inequality and the rate of growth and investment is indeed robust however not linear.

 

Robert J. Barro, Harvard University found in his study "Inequality and Growth in a Panel of Countries" that higher inequality tends to retard growth in poor countries and encourage growth in well developed regions.[1] In their study for the World Institute for Development Economics Research, Giovanni Andrea Cornia and Julius Court (2001) reach analogous conclusions.[2] The authors therefore recommend to pursue moderation also as to the distribution of wealth and particularly to avoid the extremes. Both very high egalitarianism and very high inequality cause slow growth.

 

Income inequality diminishes growth potential through the erosion of social cohesion, increasing social unrest and social conflict causing uncertainty of property rights. Extreme inequality can effectively reduce access to productivity enhancement measures, or cause such measures to be allocated inefficiently toward those who already have, or can no longer absorb such measures.

 

On the other hand, The World Bank World Development Report 2000/2001[3] shows, that inequality and growth are not related. Inequality neither drives growth nor does it impair growth. Other Research (W.Kitterer[4]) also shows, that in perfect markets inequality does not influence growth. In real markets redistribution contributes to growth.

 

Considering the inequalities in economically well developed countries, public policy should target an ‘efficient inequality range’. The authors claim that such efficiency range roughly lies between the values of the Gini coefficients of 25 (the inequality value of a typical Northern European country) and 40 (that of countries such as China[5] and the USA[6]).

 

The precise shape of the inequality-growth relationship depicted in the Chart obviously varies across countries depending upon their resource endowment, history, remaining levels of absolute poverty and available stock of social programs, as well as on the distribution of physical and human capital."

 

 

http://en.wikipedia.org/wiki/Income_distribution

http://en.wikipedia.org/wiki/Gini_coefficient

[Winstonm]

Regardless of which candidate wins, neither will admit that American exceptionalism is at an end - and no voters want to hear the truth, anyway, so we have by default a beauty pageant presidential election - or maybe it's a new reality show: The Last Great American President.

 

 

"....Acknowledging the limits of American power is a precondition for stanching the losses of recent decades and for preserving the hard-won gains of earlier generations going back to the founding of the Republic. To persist in pretending that the United States is omnipotent is to exacerbate the problems that we face. The longer Americans ignore the implications of dependency and the longer policy makers nurture the pretense that this country can organize the world to its liking, the more precipitous will be its slide when the bills finally come due."

Andrew J. Badevich, The Limits of Power

[DrTodd13]

Absolutely.  I don't have a "We."  So my answer is more akin to "If you're calling They #1 terrible, are you calling They #2 terrible, too?"

If you must know, I really like Barack Obama. I really dislike, among many others, John McCain, George W Bush, Hillary Clinton, Nancy Pelosi, Mitt Romney, John Kerry, and pretty much everyone else :)

Josh....if you were stupid, you could go through life like most people believing every four years that the next candidate is really going to change things. But, you're smart so I suggest that you just accept complete disillusionment now and don't have your heart broken should Obama win. A year or two down the line you'd then be forced to accept that it is business as usual.

[DrTodd13]

What's an appropriate percentage of nation's total income tax revenue for the top 1% to pay?

Better question: what is an appropriate percentage of the total income to be earned by the top 1%?

Income is a proxy for benefit to society. So, your question is basically, what is an appropriate amount for someone to benefit society. No one is forced to give these people money. They do so because they value what those people have to offer. Who are you to say that people should not highly value what certain people have to offer?

[jdonn]

Absolutely.  I don't have a "We."  So my answer is more akin to "If you're calling They #1 terrible, are you calling They #2 terrible, too?"

If you must know, I really like Barack Obama. I really dislike, among many others, John McCain, George W Bush, Hillary Clinton, Nancy Pelosi, Mitt Romney, John Kerry, and pretty much everyone else :)

Josh....if you were stupid, you could go through life like most people believing every four years that the next candidate is really going to change things. But, you're smart so I suggest that you just accept complete disillusionment now and don't have your heart broken should Obama win. A year or two down the line you'd then be forced to accept that it is business as usual.

Gee, that sounds like a fun way to go through life, accepting complete disillusionment to avoid later disappointment. All of a sudden, obliviousness doesn't sound so bad.

 

Note that I didn't say anything about what I would expect to change. I just said I like him.

[DrTodd13]

Absolutely.  I don't have a "We."  So my answer is more akin to "If you're calling They #1 terrible, are you calling They #2 terrible, too?"

If you must know, I really like Barack Obama. I really dislike, among many others, John McCain, George W Bush, Hillary Clinton, Nancy Pelosi, Mitt Romney, John Kerry, and pretty much everyone else :)

Josh....if you were stupid, you could go through life like most people believing every four years that the next candidate is really going to change things. But, you're smart so I suggest that you just accept complete disillusionment now and don't have your heart broken should Obama win. A year or two down the line you'd then be forced to accept that it is business as usual.

Gee, that sounds like a fun way to go through life, accepting complete disillusionment to avoid later disappointment. All of a sudden, obliviousness doesn't sound so bad.

 

Note that I didn't say anything about what I would expect to change. I just said I like him.

Not complete disillusionment about everything...just politics.

[jdonn]

Not complete disillusionment about everything...just politics.

Well I registered to vote (something I never planned to do in my life) just to vote for him, after which I will unregister if he loses, or hang around for the next election before unregistering if he wins. So don't go thinking that I'm too 'illusioned' about politics.

[cherdano]

Not complete disillusionment about everything...just politics.

Well I registered to vote (something I never planned to do in my life) just to vote for him, after which I will unregister if he loses, or hang around for the next election before unregistering if he wins. So don't go thinking that I'm too 'illusioned' about politics.

..and you even made a prescient move to a swing state in order to have some impact!

[PassedOut]

Income is a proxy for benefit to society.

A religious belief, accepted on faith...

[Mbodell]

On the other hand, The World Bank World Development Report 2000/2001[3] shows, that inequality and growth are not related. Inequality neither drives growth nor does it impair growth. Other Research (W.Kitterer[4]) also shows, that in perfect markets inequality does not influence growth. In real markets redistribution contributes to growth.

In other words the question of would you rather have a bigger pie or a more fairly divided pie is a false dichotomy. The answer is you can have both a bigger pie and a more fairly divided pie.

 

Also, as pointed out, income inequality is only a proxy. Wealth inequality is even more pronounced then income inequality. Also social mobility is a reasonable consideration. Of course social mobility is also less in the US than in most other developed countries.

[mike777]

On the other hand, The World Bank World Development Report 2000/2001[3] shows, that inequality and growth are not related. Inequality neither drives growth nor does it impair growth. Other Research (W.Kitterer[4]) also shows, that in perfect markets inequality does not influence growth. In real markets redistribution contributes to growth.

In other words the question of would you rather have a bigger pie or a more fairly divided pie is a false dichotomy. The answer is you can have both a bigger pie and a more fairly divided pie.

 

Also, as pointed out, income inequality is only a proxy. Wealth inequality is even more pronounced then income inequality. Also social mobility is a reasonable consideration. Of course social mobility is also less in the US than in most other developed countries.

Social mobility is less?

 

 

I thought Obama is proof it is much much more?

 

As for a bigger pie and more fairly divided pie I am all for that...now if we can just agree on what fair is, but then I am the guy who posts about the Singularity coming in 2050 when others say it will never come or is tens of thousands of years away so.....:)

 

 

btw I note Krugman has been writing column after column advocating for a return to 70-80% top tax bracket and says it would not hurt wealth creation or productivity. Another issue is how happy Denmark is with their economic policies.. :)

[Lobowolf]

On the other hand, The World Bank World Development Report 2000/2001[3] shows, that inequality and growth are not related. Inequality neither drives growth nor does it impair growth. Other Research (W.Kitterer[4]) also shows, that in perfect markets inequality does not influence growth. In real markets redistribution contributes to growth.

In other words the question of would you rather have a bigger pie or a more fairly divided pie is a false dichotomy. The answer is you can have both a bigger pie and a more fairly divided pie.

 

Also, as pointed out, income inequality is only a proxy. Wealth inequality is even more pronounced then income inequality. Also social mobility is a reasonable consideration. Of course social mobility is also less in the US than in most other developed countries.

"evenly divided" isn't a great proxy for "fairly divided."

[NickRW]

My guess is that "regular Americans" wouldn't run for president. And because of the astronomical cost of a campaign, they wouldn't be able to either.

 

What worries me most that to win the election, the candidates must simplify very complicated situations to something black and white, i.e. they cannot really say what's really important without losing votes.

Ya_humph. It strikes me that most elections in most countries seem to have more in common with a beauty contest than a serious political debate. Unfortunately, from afar anyway, in the case of the US this seems to be particularly so.

 

Some things make me feel old. Yuck.

 

Nick

[Winstonm]

It strikes me that most elections in most countries seem to have more in common with a beauty contest than a serious political debate. 

 

Great minds supposedly think alike

 

and no voters want to hear the truth, anyway, so we have by default a beauty pageant presidential election

[jtfanclub]

When AIPAC stops supplying all the presidential candidates perhaps then there will be real change. I wouldn't hold my breath....

You really think Obama was picked by AIPAC?

 

AIPAC is run by Orthodox Sephardic Jews. Obama is run (Axelrod/Plouffe) by Reformed Ashkenazic Jews. It would be like saying that Romney was being run by the Vatican. It shows no understanding of Jewish sects or politics.

 

Unless you just thought that saying "Jews" would sound anti-Semitic.

[mike777]

Joe Biden

 

attack.......attack attack is Biden?

[luke warm]

i'd prefer clinton/biden or biden/clinton or maybe even biden/obama ... i think it's a good choice, though

[Winstonm]

When AIPAC stops supplying all the presidential candidates perhaps then there will be real change.  I wouldn't hold my breath....

You really think Obama was picked by AIPAC?

 

AIPAC is run by Orthodox Sephardic Jews. Obama is run (Axelrod/Plouffe) by Reformed Ashkenazic Jews. It would be like saying that Romney was being run by the Vatican. It shows no understanding of Jewish sects or politics.

 

Unless you just thought that saying "Jews" would sound anti-Semitic.

I would suggest that any politician who does not receive the support of AIPAC has little chance of winning the election.

 

From NBC's Andrea Mitchell

In his speech to AIPAC, Barack Obama laid out a very hard line position that was music to the ears of the pro-Israel lobby -- attempting to counteract McCain's (and Clinton's) suggestions that he would be too willing to negotiate with Iran.

 

Using the anti-semite claim is lame.

[helene_t]

Generally first world countries are more equal and third world countries are less equal. The US is the one exception

This is partly (but without doubt not only) because the US is the largest developed country. Suppose each of the 50 states had a Gini index comparable to that of a smaller developed country like e.g. Austria. Then the US as a whole would still have a larger Gini index than Austria because the disparity between the states adds to that within the states.

 

Thanks, Arend, for posting this interesting like to the Wiki article about the Gini index. It seems that Mexico, France and Norway are the clearest cases of countries that have had diminishing disparity. Maybe interesting that Bulgaria's Gini index suddenly fell drastically after the fall of the communists, after having been rising for some time. (Or maybe not so interesting: I can imagine some problems with making those statisticis during the turbulent 90s in Eastern Europe, as well as under the communists).

[jtfanclub]

I would suggest that any politician who does not receive the support of AIPAC has little chance of winning the election.

And you believe this because a little angel came down and told you this while you were sleeping?

 

This is just, well, stupid. You believe that if a person is a politician who has a chance of winning then he must be supported by AIPAC, and now you're waiting for a politician who has a chance of winning who isn't supported by AIPAC. Except that, when one shows up right in front of you, you don't recognize him because you assume that any politician who has a chance of winning etc etc.

 

Trust me on this one. Obama isn't supported by AIPAC. There are very different, opposed factions in Israel. The faction that supports Obama is not the faction that runs AIPAC.

 

EDITED TO ADD: Now, Biden, on the other hand, he's AIPAC. So maybe Obama picked him in part to keep the Zionists from getting too upset.

[Mbodell]

On the other hand, The World Bank World Development Report 2000/2001[3] shows, that inequality and growth are not related. Inequality neither drives growth nor does it impair growth. Other Research (W.Kitterer[4]) also shows, that in perfect markets inequality does not influence growth. In real markets redistribution contributes to growth.

In other words the question of would you rather have a bigger pie or a more fairly divided pie is a false dichotomy. The answer is you can have both a bigger pie and a more fairly divided pie.

 

Also, as pointed out, income inequality is only a proxy. Wealth inequality is even more pronounced then income inequality. Also social mobility is a reasonable consideration. Of course social mobility is also less in the US than in most other developed countries.

Social mobility is less?

I thought Obama is proof it is much much more?

My humor detector is never sure if you are joking or not, but:

 

Using the ratio of an individual’s current income to that of their parent’s, the United States has much less relative mobility than other industrialized nations. The income of our parents is a great deal more predictive of our own incomes in the United States than other countries. France, Germany, Sweden, Canada, Finland, Norway, and Denmark all have more relative mobility than the US, while only the United Kingdom is shown to have less mobility. According to this study done by Miles Corak, The United States ratio of relative mobility is 1, whereas the other countries mentioned with more mobility have a range of 1.25 (France) to over 3 (Denmark).

 

from wikipedia

[Winstonm]

QUOTE (Winstonm @ Aug 23 2008, 08:34 AM)

I would suggest that any politician who does not receive the support of AIPAC has little chance of winning the election. 

 

And you believe this because a little angel came down and told you this while you were sleeping?

 

No, but perhaps I worded this incorrectly so let me rephrase: I do not think any presidential candidate has much chance being elected in the U.S. if AIPAC is stongly opposed.

 

This is just, well, stupid.

 

Perhaps you mean ignorant rather than stupid. Stupid means unable to learn or adapt. So surely you did not mean that word, as when you combine the meanings of your two posts, you seem to imply that a lack of knowledge about politics and the underlying religious beliefs of opposing Jewish lobbies is the root of my misunderstanding - thus a lack of knowledge would be ignorance. Maybe you are simply ignorant of the differences in the meanings of the two words.

 

Then again, I could be giving you too much credit - you might simply be too stupid to understand the differences.

 

Trust me on this one. Obama isn't supported by AIPAC. There are very different, opposed factions in Israel. The faction that supports Obama is not the faction that runs AIPAC.

 

We aren't talking about Israeli factions, but organized U.S. lobbyists. AIPAC is the Zionist ogranization with political strength within the U.S. IMO, if AIPAC is strongly opposed to a candidate, that candidate has little chance of winning.

 

EDITED TO ADD: Now, Biden, on the other hand, he's AIPAC. So maybe Obama picked him in part to keep the Zionists from getting too upset.

 

And why would he be concerned about upsetting the Zionists if the Zionist lobby wasn't critical, especially if his own non-AIPAC support is slighted at the same time?

[Mbodell]

Generally first world countries are more equal and third world countries are less equal.  The US is the one exception

This is partly (but without doubt not only) because the US is the largest developed country. Suppose each of the 50 states had a Gini index comparable to that of a smaller developed country like e.g. Austria. Then the US as a whole would still have a larger Gini index than Austria because the disparity between the states adds to that within the states.

While it is true that you can get higher numbers than the individual countries by grouping larger dissimilar countries together (I.e., like all of Europe including non-EU countries), I'm not sure that is fair since there isn't an apples to apples comparison either when there isn't a gov't with a tax policy and many other laws on contracts, workers rights, etc. that can shape the tradeoffs.

 

More importantly, if you break the US down into its component states - making the comparison very fair (if anything favoring the US as the 50 states in the US are smaller than European countries), then the US still has much, much higher numbers. In fact the Gini coefficients inside each state is very similar to the Gini coefficients of the country as a whole. The high numbers are really a factor of the way the US is and works, not the fact the US is a big country. Out of all 50 states and the district of Columbia Alaska is the lowest Gini and even it is over 40 for household income.

 

See us census data of Gini by state.

[helene_t]

Thanx, Mbodell. I kinda surprised me that many states have higher Gini index than the country as a whole. Apparently disparity between the states is a minor issue.

[kenberg]

After a few good hikes iin the Shenandoah I came back to find the thread has a life of its own. No one seems to have had the same reaction to the "How many houses.." that I did: Hilarity first, analysis later if at all. I read the question and answer, I laughed out loud, refilled my coffee cup and laughed some more, read it to my wife and we both laughed. This was essentially the reaction I had to Dukakis in a tank, "Show that clip again, it's hilarious", hence my question. Whatever Dukakis' qualifications for being Commander in Chief, the clip was devastating. A voter walking into the booth and reaching for the Dukakis lever could not help but remember it.

 

I am a professor and, worse, a mathematician. I have never known anyone, no matter how absent minded, who cannot answer the question "How many houses do you own?" Of course if you ask a real estate speculator he may not know his current total but no one would understand the question in that sense. I sat there visualizing a scene in the McCain household: "Cindy, the MasterCard bill is a bit high this month. There is something about a castle in Scotland, do you know anything about that?".

 

This has no real bearing on McCain's abilities, neither did the shot of Dukakis in a tank relate to his abilities. But it has an effect. And as for the immediate politics, the next time McCain's forces call him an elitist I imagine the response to be "Uh huh. Well, I do know how many houses I own."

 

As mentioned before, I don't care if he owns ten houses. I expect a guy to be able to say how many kids he has, what their names are, and how many houses he owns.