Chart: You're Working More But Earning Less?!!

The US has a $15 trillion economy!! If people cannot make a living within a $15 trillion economy then shame on those people. 145 million US workers are earning a legal living while another 10 million are working under the table. If the 50 million who demand everything yet refuse to pay their share are not happy with their position in the $15 trillion economy, then they need to take some steps to do whatever is needed to achieve more in life...constant whining like a baby will not solve anything.

Instead of ignoring why so many people make such horrible decisions about how to manage their lives, becoming eternally unhappy, and blaming others for their failures...why not use the government to help seek change in these areas? Why must it always be welfare? Why do we want to create millions of government dependents? Why do you always want to punish those who succeed and force them to pay for those who fail?

 

Only one question here; Do you believe kids who finish public education, avoid crime and drugs, obtain a college degree or trade skill, live within their means, and place themselves in employment areas, are going to do worse or better than kids who do the opposite?

 

I'm not missing any big picture? I painted the big picture which you responded stating IMO the economy is there for the taking...how much each person takes is 100% up to them. They can take $15K a year, $100K a year, $10 million a year, or $0 a year...it is 100% their decision how they wish to be involved. And since there is only so much economy, one which does not expand at the same rate as population growth, those who wish to participate in the economy MUST compete for their positions. Those who fail these fundamental rules have no right to complain about others successes. IMO there is no such thing as inequality except in the annals of politics. If two people both with incomes of $15K a year compare each others lives...they should find some similarities. If two people, one with $15K income and another with $1 million income compare each other...we will see obvious differences in their lives. Now...if the $15K earners aspires to live like the $1 million earner, then the $15K earner needs to take steps to change their course. And part of this course change is not taking from the $1 million person! Iriemon likes to compare the 1% to the 99% and I suggest the 99% will always find something to complain about. My neighbor has a corporate jet and I do not therefore I am unhappy...how stupid would this be for me to whine about what my neighbor has? The 'grass is always greener' certainly is the root of these political diatribes.

Interesting that gas station convenience stores sell $1 trillion per year in alcohol and tobacco, and daily millions of lottery tickets are purchased, and in hundreds of casinos around the nation you can't even find a place to sit because they are so busy...in general these are not the upper middle class and wealthy people...these are the people who are complaining they can't live...

 

Raise Corporate taxes. End of debate.

 

To the contrary, FICA is used to run the nation. It pays benefits to scores of millions of retired people as well as the disabled and survivors. And for two decades the extra money people paid were used to fund general government, including the tax cuts for the uber rich.

It was a massive take from the poor to give to the rich scheme. The Sheriff of Nottingham would have been green with envy.

Why should anyone expect a 1% apologist to say differently? You want to keep the middle class dirt poor and reap more profits from their labor.

Because for heaven's sake, the 1% getting 20% of the nation's income and having about 40% of the nation's wealth, doubled since the Reagan "trickle down" revolution, isn't enough for you, is it?

More is never enough for some.

Trickle down, baby. Make the richest richer. Suppress their wages. Keep the minimum wage low. Suppress unions that could leverage better wages for them. Keep the OT laws as weak as possible. Knock out those regulations that protect workers and consumers. Cut government assistance to the needy.

That way you and the 1% can take more and more of the nation's income and weatlh. Because more is never enough. That's what's it's all about.

1% talking point #5. Nothing is different.

No, nothing at all.

90% of Americans did not just stop putting forth effort, stop achieving skills and education, start taking drugs and start comitting crimes in 1981.

That is not what happened, and it is just ludicrous for you to argue it.

This is simply the 1% apologist claptrap we hear to excuse the "trickle down" policies that have helped redistribute the bottom 90% share of the nation's income from 65% to only 50%. It's not way the 1% is getting 20% of the nation's income, double from before the Reagan "trickle down" revolution.

But that's their excuse. the 90% just got lazy and stopped going to school and getting good grades stopped avoiding crime and drugs.

If it sounds completely inane it's because it is.

 

1% apologist talking point #16. It's the middle classes fault they are poorer. Shame on them.

1% apologist talking point #1.

You see, what really happened in 1981 was that the 90% of Americans just started making horrible decisions with their lives. That's why we say the middle class's share of the nations income drop from 65% to just 50% since the Reagan "trickle down" revolution.



The fact this happened at the exact time of the Reagan "trickle down" revolution is just one big massive coincidence! So what if it was designed to make the rich richer! Just a big coinky dinky.

1% apologists make sense. If you ignore reality.

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Tell me how that question bears upon the fact that since the Reagan "trickle down" revolution, the bottom 90% have seen their share of the nation's income drop from 65% to 50%, while the top 1% has gone from taking less than 10% to 20% of the nation's income. And then I will answer it.

 

So tell us with your world view.

Why has the middle class' share of the nation's income dropped from 65% in 1980 to just 50% (or less) today? Did the middle class collective just decide collectively to take $2.5 trillion less of the nation's income each year?

Why did the 1%'s share of the nation's income increase from about 10% in 1980 to about 20% today? Did the upper 1% just collectively decide to take another $1.7 trillion chunk of the nation's income each year?

 

It's clear. You seemed to be arguing earlier that it was the change in the "exchange rate of gold and dollars" that caused inequality to increase.

So to be crystal clear, your argument is that increases in the money supply cause inequality to grow, correct?

And when you say "money supply" can you specify what you mean? M0, M1 or some other measure? Mises' folks often used uncommon definitions, I've noticed in the past.

And so would it be fair to see that with greater increases in the money supply, we would see inequality growing faster and vice versa?

That is not correct. That argument contains the fallacy the because the inequality rates starting increasing for one reason (which you have not demonstrated at all) it must have continued increasing for the same reason and no other reason.

That is not an accurate premise at all. The Gini could have started increasing for one reason, but continued increasing outside the 4 decade normative zone for different reasons altogether, including the Reagan "trickle down" revolution.

Your own source and the data on income percentages going to the top 1% and top 10% show just that.

I have not ignored it at all. But it wasn't the stagnation in the 70s but the stagnation in the 80s and 2000s and lesser extent 90s, at a time when 1% incomes were skyrocketing, that caused it.

See above. You have not "established" it at all. You've merely asserted it.

Baseless assertions.

OK, let's stop right here because these posts take a long time, and if you cannot even concede a black and white point, then it becomes silly to waste my time.

I wrote: "Your argument is directly contradicted by your own article. As it points out, there was no increase in inequality in the 1970s, a period of strong monetary expansion. To the contrary, it was the period of monetary contraction in the 1980s that corresponded with inequality growth."

To which you responded: "Only if you misread the article. The article supports exactly what I am saying."

I then quoted your article:

From 20 feet away, anyone can see that something bad happened to the U.S. economy in 1968. Prior to that, America experienced rapid income growth that was widely shared. The incomes of both “the ten percent” and “the ninety percent” increased by 80% in just 20 years. We had prosperity, without rising income inequality. This 21-year “golden age” then gave way to 14 years of income stagnation, which was also widely shared. Incomes didn’t rise, but neither did income inequality.

Your own source says in black and white that income inequality did not rise int eh 14 years after 1968, which would be to 1982.

That directly contradicts your claim that inequality started rising in 1971.

Now you can argue whatever you want about why you think your source is wrong.

But if you cannot concede the simply point that he contradicts your claim, then frankly it is silly to pursue this discussion because we're just going to go round and round about the same things.

 

Raising corporate taxes effects a sales tax, because corporations will to the extent they can get away with it, raise their prices to compensate for the tax.

So it ends up being the middle classes that pay most of the tax.

Meanwhile the guys who benefit most from the corporation, the owners and top management, pay less tax.

if your goal is to effectively push more of the tax burden on the middle class, it makes sense.

 

All diatribe...1% apologists, Sheriff of Nottingham, trickle down...the only thing missing from your posts is some very very sad violin music!

FICA money is not 'given' to the general fund? The US government trades interest bearing bonds for the FICA surplus monies...get your lack of facts straight.

Unions have over-served their real use to society...today they are just a bunch of goons who make demands.

No more conversation from me on this since I cannot respond to a diatribe...

 

How do you add that? Heh heh

For two decades the US Govt applied about $3 trillion of excess SS tax payments to fund the government for other things, like tax breaks mostly benefiting the richest.

I disagree, evidenced by the fact that the decline of unions corresponds with the decline of middle class wages relative to GDP.

Fine.

 

What you say is true if we live in free market conditions, but our monetary and banking system are antithetical to free markets. The Federal Reserve forces inequality into the market that would not exist without their intervention. That's a problem. Inequality per se is not a problem. But it can be depending on the cause.

 

This is the republican plan

 

You have still failed to demonstrate how "The Federal Reserve forces inequality into the market".

From earlier in this thread, the only thing you argued was that the Fed gives newly created money to the rich, which as I've demonstrated, is simply not true. It effectively goes to the Govt.

 

All else remaining equal, if the money supply increases and new money circulates throughout the economy, those who receive the new money earlier will get richer at the expense of those who receive the new money later. In the U.S. monetary and banking system, when new money is created it is given to bankers. Banks also create money by expanding credit. Thus the ultimate money creation power (and decision of who gets the money) lies with the banks. This gives them great power, and creates inequality and a transfer of wealth from the poor to the rich.

Now new money were given to the lower and middle classes, how wealth is transferred may be different. But in our system, the bankers and financial elites get the money first.

In the study I referenced earlier, M1 was found to have the greatest effect and that is the definition I would use. This makes sense, as other measures of the money supply include forms that are less liquid and thus less likely to circulate throughout the economy, thus deluding the effect.

Now inequality is not soley caused by expansion of M1. That is ludicrous. The other key factors identified in the literature are fiscal policy and education levels. The study I referenced confirmed this, but added M1 to the equation. It too had an effect on inequality. So if other factors are constant, and M1 increases at a faster rate, I would predict a greater increase in inequality than otherwise.

You made the same argument you are now calling invalid. I mentioned the end of the gold standard (1971) as a cause, and you pointed to 1968 as when the trend began, using that to disprove my argument that the gold standard was the cause.

I grant you that the argument does not necessarily debunk your claim, just as yours does not necessarily debunk mine. But it does make the claim less plausible or at the very least calls it into question.

The stagnation clearly began in the early 1970s, and that trend has persisted to the present day. You cannot ignore the beginning of the trend that began a decade before any of Reagan's policies went into effect. I granted that Reagan's policies led to rising incomes of the rich, but that was only a problem because incomes of everyone else did not rise equivalently. The end of the gold standard led to stagnation for everyone, but Reagan was only able to end the stagnation for the rich. His policy was half-right, missing the part that would end stagnation for everyone else. But again, the root problem is the stagnation itself.

I maintain that income inequality began to trend upwards in the 1970s. Even the pew research center, which I view as largely unbiased, confirms this.

To the part in the article you are referencing, I would say the author is mistaken on that point. He rightly pointed out that Reagan's policies helped the rich, and rightly pointed out that the it was the stagnation caused by the end of the gold standard that led to stagnation. The chart he used did a good job at showing income stagnation, but did not do a good job representing inequality. The Gini index, which is a better measure of income inequality, should have been used.

My point of referencing the article was to acknowledge that the root of the problem was the stagnation of the 1970s, and to explain why the greater increase in inequality occurring under Reagan would not have occurred had the gold standard remained.

 

It does not go to the government. That is simply incorrect. When the Fed creates money, it goes directly into the banking system. In fact, the government owes money to the Fed since the Fed becomes the holder of the bonds instead of the banks. The Fed also purchased mortgage backed securities. This is not even a point made up by Austrians, and is well established among pretty much all economic disciplines. It is simply how the system works.

Apple stock prices are currently at $110. If I buy a share of Apple, do they get $110 more dollars? No. The investor I bought from gets the money, and is free to spend it as he or she wishes. Likewise, when the Fed purchases bonds from the banks with newly created money, does that newly created money go to the U.S. government to spend? No. It goes to the banks, who are free to spend it as they wish.

I'm not sure why you are arguing this point. I understand arguing against the less mainstream points of Austrian economics, but that banks receive new money from the Fed is something nearly everyone accepts as a reality.

 

You've been mislead by your anti-Fed sources. Let's walk through it again. You tell me where I'm wrong.

Govt issues a bond. That bond is purchased on the open market by wealthy individuals, institutions, and foreign governments. Some banks hold them but there holding of outstanding Govt debt is a small fraction of outstanding loans.

So what has happened? Wealthy individual/institution/foreign government gives dollars to the US Govt and they get the bond, right? The US Govt gets $$$.

So now the Fed wants to expand the money supply, creates money out of thin air, and buys the bond from the wealthy individual/institution/foreign government.

So what has happened overall?

wealthy individual/institution/foreign government has $$$ as it had before, basically a wash though they may make a few bucks on the sale.

Fed is out $$$ but has the bond. It gets interest from the Government, but then gives most of it back.

So where has the newly created money really gone? Not to the

The Govt has received $$$ for the bond issued. Not to a wealthy individual/institution/foreign government or a bank, but to the Govt, which got the $$$ for issuing the bond.

That is the way it works normally.

I agree that with the QE where the Fed was also buying US govt guaranteed mortgage loans (which I think was half the purchases) it was a little different. In this case, it was home buyers who got the money, and used to buy homes paying off the sellers or builders who eventually were the ones who got the $$$.

But even here, the banking institution had $$$, lent it out and held a mortgage. When the Fed bought it, the institution had $$$ again so was in the same basic place as before the loan was made, and it was the borrower/seller/builder who really got the $$$.

But I agree in this case the purchases did help to benefit the banks shore up their spreadsheets, which is what it was designed to do.

But that is not the norm and so doesn't explain your theory.

The problem with your analogy is that you seem to think that wen the Fed purchases money, it is only banks that have them and sell them. That is not true. Financial institutions hold some US Govt bonds, but they only hold a small fraction of them, and certainly are not the main sellers of bonds to the Fed.

Exactly how do you think it "goes to the banks" as you believe?

What may be confusing you is that the Fed operates through brokers called "Primary dealers" some of which are affiliated with banks. These brokers handle the transactions, but like a stock broker, they are not the ones that end up with the new money ultimately.

Maybe "everyone at Mises". But that is not the reality of how money is created.

 

How so? If I have a $10k US Treasury bond, and sell it to the Fed for $10k, am I 10k richer? Or take a step back further.

If I have $10k, and give it to the Govt for a $10k bond, and then sell that to the Fed for $10k, am I $10k richer?

No.

This is just flat out false, and if you've been informed this from Mises, you've been misinformed.

Banks can expand deposits by lending to a degree. But the ultimate money creation power is with the Fed.

The fact that banks can lend money doesn't transfer wealth from the poor to the rich, and they've certainly been lending money since before 1981 or whatever date you want to use.

Thank goodness for small concessions of logic.

Fiscal policy and education levels do not explain the great income equality gap since the Reagan "trickle down" revolution.

I think you'd find your prediction has a poor correlation. M1 expanded rapidly in the 70s and the inequality gap grew slightly, if at all. M1 expanded much more slowly in the 80s and you had a huge skyrocketing of inequality.

I agree that there is one measure, the Gini index, that shows there was an uptick in inequality in the 70s, but it stayed well within the 40 year norm and it didn't break out of that norm until the Reagan trickle down revolution when it skyrocketed.

Other measures, such as income percentages going to the wealthy and your own source show the inequality gap started in the early 80s. So the evidence is condraticting until the 1980s, when it is clear inequality skyrocketed.

You have "mentioned" the gold standard as a cause, but have failed to provide any legitimate argument for why it would be a cause.

Given that the very objective of the Reagan "trickle down" revolution was to make the rich richer, I don't think it is less plausible at all. I don't see any other legitimate explanation for it, though lord knows, the 1% apologists have tried. Obviously they, like you, don't want to concede that it was "trickle down" policies -- designed to make the rich richer -- that did just that.

The fallacy is the assertion that this stagnation was because of monetary policies when you've failed to demonstrate a basis for causation.

You can maintain whatever you want. The data including your own source is contradictory. But we know it exploded in the 1980s.

His position that inequality started growing in the early 1980s is perfectly consistent with the 10 or so different sources I showed evidencing the same thing.

It didn't establish it as I explained.

 

Again, post hoc fallacy. You're simply making the unfounded claim that it was caused by money policy.

There are many reasons why it could have changed.



This graph breaks it down in more detail. While the 70s may have been stagnant over all, we see real wages increasing till about 1973, then declining til about '75, increasing til '79, and then dramatically falling. What happened in 74 and 79? Recessions. Recessions will knock down the wage rate.

Then in the 1981, we see real wages dropping, but this time, they don't come back up until the 1990s where it improves for a time.

What else is happening in the 1980s? "Trickle down". MW suppressed. Unions continue their downward slope. Taxes increased on the poorer/middle and slashed for the richest. De-regulation. A focus on increasing corporate profits over workers' incomes..

Again, you repeat this assertion, but you've yet to demonstrate why or how.

Addressed in other posts.

You haven't shown correlation at all. Correlation means that there is consistency between the variables over time. Simply point to one date and saying monetary policy caused it is not proving correlation.

That's not completely true (wages for the poor could fall while are stable for the rich) but I agree that is one way and the way it happened.

Or to put it another way, why did virtually all of the growth in income and wealth go to the rich?

That is false. I have. I have pointed out how the MW was supressed, how unions were suppressed, their taxes were raised

Correlating with 70s recessions and then Reagan's trickle down policy.

I thought when I asked you to clarify, you said it was money supply, now you're back to saying getting off the gold standard. Which argument are you going to go with?

Of course. Why would you think that "trickle down" policies, designed to make the rich richer, wouldn't accomplish exactly what they were intended to do?

You haven't established that at all.

If that caused it and if the recessions didn't and if the "trickle down" policies didn't etc.

 

I started a thread with the facts you seek.

it was ignored

 

Agreed, but of course I've never claimed that was the sole cause of it.

"Tax rates reduced for everyone" is an old RW propaganda mythology. Millions do not pay income tax but pay FICA tax. Neither Reagan nor Bush cut FICA taxes. In fact they were raised under Reagan in 1983. So it is not true that there was no disparaty until 1988. He didn't even have a 1988 tax policy for that matter. His last major tax revision was in 1986.

Delcine of unions:



Real minimum wage history:

Of course they are biased, they are pushing their agenda. It does not mean their work is invalid. It is invalid for the reasons I have explained.

Prove that they only buy bonds from banks.

Then tell me where the banks that have bonds get them from.

I'm seeing the error in your argument here.

Exactly. The affect of money supply increases prices of everything, including wages. So if a guy was making $10k and a car costs $5k in y1, and he's making 11k and a car costs 5.5k in y2, he's no worse off.

It's what happens to his wages relative to other prices that make the difference.

The MW is only one of several factors. But it also affects the wages of people making a little more than the MW.

Inequality should be a concern because if the middle classes doesn't have the money to spend, the entire economy suffers.

If one guy had all the money in the world and no one else did, you'd have an economy that subsisted only of producing what he wanted. Obviously not the optimum.

Ideally, the middle class should have more of the nation's income, with the innovators entrepreneurs risk takers etc. making just enough to incentive them to do their thing.

A little, but he didn't end up with the bulk of the money, right?

The bank doesn't have the power, the Fed does. and the US Govt does, since it was the ultimate recipient of the $$$, right?

False analogy. Because you would not have gotten the $5000 raise but for the inflation in the first place. You would have only gotten a $2500 raise. As you pointed out, inflation affects the price of everything -- including wages and incomes.

It's a common mistake gold bugs make to assume we would have gotten the same income increases without inflation.

This is a meaningless hypothetical. Why would inflation cause is real wage to only increase to 25,000? It doesn't.

Nor does it mean that it does. Inflation affects all prices including wages and incomes. Are you now trying to say it doesn't?

Now your going off in to the realm of the ridiculous. What "Federal Reserve policy of giving all middle and low income families salary cuts and transferring that money to the rich."

You are showing how your blatant bias clearly affects your judgment and reason.
Except that is not the case. The expansion of the money supply made possible by the end of the gold standard has led to a prolonged and systemic stagnation of wages for the middle and lower classes never before seen in this country. Empirical and logical evidence supports this claim.[/QUOTE]

 

http://www.politicalforum.com/econo...-wins-life-lottery-richest-u-s-age-group.html

 

It's simple...achievers achieve more and non-achievers achieve less...but you'll never accept anything as novel and logical as personal responsibility...

 

Do you disagree with my statement; 'the economy is there for the taking...how much each person takes is 100% up to them. They can take $15K a year, $100K a year, $10 million a year, or $0 a year...it is 100% their decision how they wish to be involved.'?

Do you also disagree with this statement 'Interesting that gas station convenience stores sell $1 trillion per year in alcohol and tobacco, and daily millions of lottery tickets are purchased, and in hundreds of casinos around the nation you can't even find a place to sit because they are so busy...in general these are not the upper middle class and wealthy people...these are the people who are complaining they can't live...'? How is it possible to give any credence to people whining about income and wealth when those whining are wasting trillion$ every single year?

You and others are so politically biased that you cannot accept reality. The REALITY is ALL kids today, can attend public education, can attend college and trade schools, IF they avoid crime and drugs and work hard for good grades. If you complain that people are failing in the US economy then exactly who do you blame for this failure...the answer cannot be everyone else! The reality is each of us makes all the decisions how we create our lives and we either do well or fail or something in between. Instead of accepting OUR failures, and instead of demanding government provide the best possible infrastructure for our kids...all of which is called responsibility, we make up all this crap about minimum wages and living wages and inequality etc. etc. all of which will never solve the perceived problems...never!!

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My plan is for all the whiners to look in their mirrors and ask themselves what THEY need to do to achieve more of whatever it is they desire...

 

There we have it folks, the 1% apologists excuse for why they are getting 20% of the nation's income and have about 40% of the nations wealth, double since the Reagan "trickle down" revolution.



It's not because taxes were raised on the poorer/middle class workers. It's not because taxes were slashed for the richest. It's not because unions have been beaten down or because the minimum wage has been suppressed or because OT application has been curtailed or because jobs have been outsourced.

Its just that starting in 1981, the 1% "achievers" achieved twice as much while the 90% of Americans are "non-achievers" and just decided to start achieving less at the same time.

The fact this all happened at the same time as the Reagan "trickle down" revolution is just a biiiiiiiiig coinky-dinky.

Don't be fooled by their excuses and justifications for the policies that has decimated the middle classes and made the rich richer than ever. 90% of Americans did not just decide to start becoming "non-achievers" in 1981.