The Least, First

Monte Asbury's blog

Posts Tagged ‘Wealth

A dramatic graph: income growth by income quintile

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Here’s another great find by the Freakonomics blog.

Dark bars, below, represent income growth across the economic spectrum from 1947-1973.  The least grew the most (br-r-ravo!), and the middle and upper classes did pretty well, too.

The light bars tell a more troubling story.  In recent times (73-05), the smallest incomes grew (as a percentage) the least.  In fact, without exception, the more income a quintile received, the greater was the percent of increase in that quintile’s paycheck. The least (thus), benefited least. The first, the most.

Put another way:  the economy disproportionately rewarded high-income people.  And it hasn’t always been this way.

clipped from freakonomics.blogs.nytimes.com

Economic Growth Across the Income Distribution

Yes, we already know the facts — income inequality has been increasing since the 1970’s. But it can be easy to lose sight of just how important this has been. This presentation of the data — by Claudia Goldin and my former thesis advisor Larry Katz, really hits home:

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Note: The figure plots the annual percentage growth rate in mean real family income by quintile and for the top 5 percent of families for 1947 to 1973 and 1973 to 2005. Incomes are converted to constant dollars using the Consumer Price Index Research Series (CPI-U-RS). The income concept used is the official U.S. Census Bureau measure of pre-tax, post-transfer money income.
Read the full Goldin and Katz posting, over at VoxEU, for a deeper understanding of why. (Hint: It’s education.)
[T]hese data remind us that for most of the distribution there hasn’t been much income growth.

Seeing it in graphic form is startling, eh?

Follow the link to the original article to explore the thesis that this all springs from education issues.

Thought-provoking! What’s your take?

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“I am the vine:” bearing fruit in a brutal world

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Urban poverty is common in developing countrie...
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Tomorrow’s gospel reading is from Jesus’ “I am the vine, you are the branches” lesson.  It’s a beauty, about which we evangelicals can easily be moved to misty-eyed marveling.

But read along as Lawrence Moore begins his analysis at Disclosing New Worlds:

Vines, branches, fruit and pruning – and “abiding”.  This is one of those “purple passages” from John’s gospel that most of us know well.  It’s a time to expound parables of grafting, pruning, getting rid of excess foliage so the grapes are plentiful and fat, about feasting and celebration … and stuff about “abiding” that hovers constantly on the edge of twee and a bit precious.

Any tendency towards twee and precious should cause us to pause.  This world is a brutal, death-dealing place.  Most inhabitants of this planet live below the breadline.  The scale of global poverty is staggering; the magnitude of starvation is terrifyingly obscene.

What makes the statistics significant is not simply the scale.  The scale is tragic.  Yet if it was inevitable and unpreventable, that is all we could call it.  It is the fact that it is preventable that is significant.  The world has never been globally richer, nor has it ever produced more food.

Global poverty is not an accident but a deliberate human creation.  It is deliberate, not in the sense that we set out to cause starvation, but in that we build a global economy that gives those of us in the west a particular standard of living so that two thirds of the planet necessarily live in abject poverty.

Some tools utilized for pruning.

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And “we” – the people with the power and decision-making ability – reckon that is an acceptable cost.  That is what makes the global statistics so obscene.

We in the West hold most of the world’s power.  We in the West hold most of the world’s money.  We could end starvation in a year.  We choose to try to get more power and money instead.

We’re busy fussing over government power or gay marriage or how we’d rather give through our churches.  And year after year, people die in droves.  Who is responsible for this holocaust?

If I were God, I’m afraid I’d begin pruning.  Maybe some other “branch,” if entrusted with the world’s riches and power, would get serious about bearing fruit.

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Ask the powerful five questions

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Like wealth of most kinds, power seems to make people smaller. Washington, D.C., (for example) is not known for its champions of selfless idealism.  Yet many of those same people came into politics with a hope of doing good.  I suspect it is a very hard place from which to keep focused on justice.

Tony Benn, Labour‘s second-longest serving member of parliament in the U.K., proposes five plain-spoken questions:

Those might raise a fuss, eh? (h/t Homeyra!)

Here’s another Benn thought-provoker:

If you talk about a global answer to a global crisis, you can’t just talk about the movement of capital, now we are told all the time we must not have protectionism, but the most powerful protectionism in the world is immigration policy. Capital can move anywhere in the world to boost its profits. But labor can’t move because of the immigration control. Now I am raising huge questions, I recognize that. But if it is legitimate for a big American company to go to Malaysia where the wag[es] are low and triple their profit, why shouldn’t a Malaysian looking for high [wages] just go to America?

Well?  Immigration as protectionism – now there’s a fresh insight!

Palm Sunday Rebellion

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Here’s the last half of my Palm Sunday sermon.  In the opening, I talked about how obvious it must have seemed to Jesus’ Palm Sunday followers that he was beginning a military coup.  Find out why at Disclosing New Worlds.


Sagrada Familia #6
Image by Alex Millà via Flickr

There’s no question in their minds that Jesus is there to conquer. And Jesus has intentionally played the part. He knows the local puppet governor will hear. He knows the Roman military machine will hear. And he knows he’s throwing rebellion in their faces.

How will tyrants respond? Think of shouts of “Free Tibet!” in Lhasa.  Or the student uprising in Tienanmen Square. Or singing the Chechen national anthem in public in Chechnya. Peasants pitching rebellion are crushed without mercy.

Extra troops were in Jerusalem during the Passover, in preparation for this very kind of thing. Passover, after all, was about the liberation of the Jews from a foreign government. The Romans would be putting on a show of force.

He’s come to wage war, all right – but no one is understanding what kind of war he’ll fight. The Romans are small potatoes to him – he’s waging war on death and darkness and power, and he’ll defeat them all.

But the crowd’s expecting literal war. And that’s not what Jesus does.

Hosanna filio David
Image by Lawrence OP
via Flickr

How strange it is that everybody there makes that mistake, and we study it, and wonder how they can have missed it. And then our generation reads Revelation’s war-talk and assumes without question that Jesus’ will return in the future to fight a violent war. As McLaren observes, when Jesus comes back to fight, his mighty sword comes out of his mouth! I want to smack my head. How could I have overlooked the obviously metaphorical language used there?

Could we still be like the 1st century crowd, expecting Jesus to bring war? Could we be making the same mistake?  Doesn’t it matter that warfare is completely inconsistent with everything Jesus demonstrated?

But here’s another strange thing: It’s all outside the city.

See the last verse? He goes to the temple, looks around, heads for Bethany. Once inside the city, the acclaim is gone.

Outside of it, the crowds adore him. Inside of it – in the seat of religious power and government power – nobody shows up. As Lawrence Moore writes at Disclosing New Worlds: Read the rest of this entry »

Senators Kyl and Lincoln propose cuts in multi-millionaires’ estate taxes

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UPDATE, April 4: “As the New York Times explained, under Obama’s budget, ‘99.8 percent of estates will never — ever — pay a penny of estate tax.'”


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Jesus’ take on things includes the idea that the rich can help themselves and the poor deserve the help of all of us. That view, espoused by many teachers, has become Government Morality 101 for Christian and non-Christian alike through the centuries: hence, most Americans today believe in progressive tax rates.

The rich have their champions, too. Two senators—one a retirement-state Republican and one a Wal-Mart-headquarters-state Democrat—have proposed relieving the nation of $250 billion to help adult kids of the very rich enjoy wealth without work:

clipped from thinkprogress.org
Sens. Jon Kyl (R-AZ) and Blanche Lincoln (D-AR) have offered a $250 billion proposal to cut estate taxes for the children of multi-millionaires
Kyl and Lincoln’s “most pressing issue is clear: America’s wealthiest families need help. Now.”
“only 0.2 percent of the additional cost of the proposal, relative to [the Obama proposal], would go toward tax cuts for small businesses and farms.”
The rest of the cost, approximately $249.5 billion, would go to the inheritors of estates worth over $7 million. Paris Hilton, get excited.
The Waltons — the Arkansas-based family that founded Wal-Mart — are one of the key groups financing the campaign
“With all the serious work before Congress, it is a colossal waste of time to have to rebut the false claims and warped premises of ardent estate-tax cutters,” the NYT writes. “Ms. Lincoln’s and Mr. Kyl’s colleagues in the Senate should make short work of it and move on to urgent matters.”
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I’m sure this will be pitched as a valiant, virtuous war of liberation against the “death tax,” but we’re talking about $7 million estates and up, here, not Grandpa’s 120 acres. And the years of Bush have given us the greatest disparity between rich and poor since the Great Depression.

Moving government income sourcing away from those who can effortlessly afford it and onto the backs of those who earn less is ethically questionable, especially in times like these. And inviting the very rich to create a generation that need not work while those who work for them can’t afford healthcare (with the Waltons, ironically—heirs of America’s largest low-benefit employer—leading the charge) ought to offend us.

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400 richest Americans’ incomes doubled under Bush tax cuts; economy collapsed

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clipped from thinkprogress.org
Bloomberg reports that, according to recently released IRS data, “the average tax rate paid by the richest 400 Americans fell by a third to 17.2 percent through the first six years of the Bush administration and their average income doubled to $263.3 million.” Much of their income came from capital gains resulting from the Bush tax cuts:
The drop from 2001’s tax rate of 22.9 percent was due largely to ex-President George W. Bush’s push to cut tax rates on most capital gains to 15 percent in 2003
Capital gains made up 63 percent of the richest 400 Americans’ adjusted gross income in 2006, or a combined $66.1 billion, according to the data. In all, the 400 wealthiest Americans reported a combined $105.3 billion of adjusted gross income in 2006, the most recent year for which the IRS has data.
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Observe the present economy. Like what you see?

O'Pari Luxury Yacht
Image by yachtfan via Flickr

Certainly the tide has risen for the very wealthy: their fortunes have doubled. But has this “rising tide” lifted “all boats?” Has trickle-down affected your income? Can we say that business has been stimulated?

Perhaps it’s a good time to wonder why tax cuts for the rich did not result in national prosperity as promised.

Mired on the shore in our jonboats, most of us look on as the yachts head for the open sea.


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Written by Monte

January 31, 2009 at 12:39 pm

Why cutting rich folks’ taxes doesn’t stimulate the economy

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And what does.

Another fascinating post comes from the ever-excellent True Conservative.

Consider: In 2007, only 9% of privately-held U.S. businesses … cited a “shortage of long-term finance” as a constraint on expansion. “Shortage of skilled workers” is No. 1.

So how do you increase the number of skilled workers? Here’s the story:

clipped from trueconservative.typepad.com
Here’s the central tenet of supply-side/trickle-down/voodoo Reaganomics:
If rich people get (and keep) more money, they will invest it and promote economic growth, so everyone will prosper.
That would (perhaps) be true if a shortage of investment were an important constraint on businesses […]
But availability of investment money is the least important constraint […]
[I]t ranks dead last on the list of business constraints. […]
A shortage of skilled workers in now the #1 constraint […]

Constraint 2
[This is the] economic view so ably explicated by James Livingston, which I summarize and link to here […]
The fact is that wealthy people can’t find truly productive investments offering sufficient returns, so they turn instead to investments that don’t have anything to do with production or productivity. (Think: MBSes, CDOs, CDSes, etc.)[…]
Since the greatest constraint on growth is currently a shortage of skilled workers, the best path to prosperity seems to be taxing those unproductive dollars and investing them in the thing that … is prosperity-producing: education.
Making sure that wealthy people have plenty of money is not the way to produce prosperity. That’s a self-serving myth […]
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Provocative, eh?


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Written by Monte

November 21, 2008 at 10:50 pm