January 24, 2003
EGALITARIANISM RUNS AMOK:
Economic Inequality Grew in 90's Boom, Fed Reports (EDMUND L. ANDREWS, January 23, 2003, NY Times)Economic inequality increased markedly as the boom of the 1990's fizzled, even as incomes increased at almost every level, according to a detailed new survey by the Federal Reserve released today.Conducted at the end of 2001, when the economy was in a recession, the survey compared wealth and income with levels of 1998. It suggests that the benefits of the economic boom were widespread but extremely uneven.
The wealth of those in the top 10 percent of incomes surged much more than the wealth of those in any other group. The net worth of families in the top 10 percent jumped 69 percent, to $833,600, in 2001 from $492,400 in 1998. By contrast, the net worth of families in the lowest fifth of income earners rose 24 percent, to $7,900. [...]
"I am alarmed and disheartened by the growth in inequality in this report," said Jared Bernstein, senior economist at the Economic Policy Institute, a liberal research group based in Washington.
Are we really supposed to take seriously the notion that while incomes for the poor went up significantly it's unfair that they didn't go up as much as those of the rich? [editor's note: we've removed a spirit-killing metaphor about rising tides here.] When we were kids, the Sister Judd got $5 from our Grandmother for her birthday in April. But then the Other Brother got $10 for his, in May. When Sister pointed out the inequity, Grandma took five bucks from Brother. The Left would presumably find this a reasonable result. Posted by Orrin Judd at January 24, 2003 1:19 AM
One other gripe -- almost all articles like this imply that these groups are static -- that the "poor" and the "rich" are always the same people. In reality, we know there's a fair amount of movement between income groups. The "poor" aren't some permanent underclass in America, and there's a fair amount of turnover as well among the "rich" (which most Americans aspire to be!).
Posted by: Kevin Whited at January 24, 2003 8:21 AMKevin beat me to it. A gloss on his point is that one of the things they ignore is immigration. Many of the people on the lowest income tier in 2001 weren't even in the country in 1991.
Posted by: David Cohen at January 24, 2003 8:23 AMMy spirits sank with the use of the "rising tide" metaphor in this context. How, one might wonder, could a rising tide lift different boats by different amounts?
I'm no harbormaster, but it seems unlikely.
On the substance, I'll ditto the earlier comments. I would also be more inclined to worry if the authors could point to successful economies where this was not a "problem".
And yet yesterday, the WSJ had an article that the rich also lost the most in the bust. Seems the poor and middle class have more money tied up in their homes than the market. Duh.
Posted by: Sandy P at January 24, 2003 11:59 AMUntil we take away as much money from the poor as the rich lost in the bust, there will be no justice in America. In the immortal words of Jeffrey Hart: Soak the Poor!
Posted by: oj at January 24, 2003 12:18 PM