[CWuestefeld]

The meme that "the rich get richer, while the poor get poorer" means that today, the poor must have a worse situation than ever before.

So let's do a thought experiment: suppose that you can choose to go back in time. You can enjoy the 1% level of income at any point in history prior to, say, 1950. What era will you choose? Do you want to go to 1950, or some point in antiquity, or stay with your current income in the present?

Remember, even in 1950, there are no antibiotics, for practical purposes, civil rights are only slightly better than medieval levels, and so on. You won't have access to instant communications, and only through difficulty, to the greatest works of art, music, and literature. And so forth.

So, if you don't want to go back to those times -- even at the top of the economic heap -- can we really say that today's poor are finding their plight worse and worse?

[guelo]

Its not only about the poor its about the 99% who's wages have stagnated over the last 30 years. The current generation under 25 is the first american generation that will be worse off than their parents.

[CWuestefeld]

It's true that the gap between rich and poor is greater today than in recent history. But I don't think that it's entirely correct to say that wealth has been redistributed to the wealthy. In fact, to a significant extent, people have redistributed themselves away from the wealth.

These wealth numbers are presented as household income. But this increasing disparity closely tracks the rise since the 70s of single-parent households. Divorce, and more recently the trend to have children without being married at all (in certain demographics, this is now the norm), mean that people are deciding on their own to arrange themselves into units having less earning power.

Even when single-parent households aren't the explanation, the idea of "sortative mating" amplifies differences in income. People tend pair off with similar people. Thus, well-educated people (who tend to have higher income potential) marry each other; uneducated people also tend to marry. So if two people, each with income potential of 2X, marry; while two others, each with income potential of 1X, also marry, then the resulting differential across households is 2X. The sortative effect has, in this example, doubled the apparent difference between people.

Neither of these effects can be attributed to corporate behavior in any way.

Obviously, some of the difference simply reflects the difference in productivity between different people. We tend to dislike thinking of things in these terms, but people doing certain kinds of jobs are far more productive than people in other jobs. In particular, the skills we've learned in wielding technology, or medicine, etc., benefit people to a much greater degree than, say, an individual McDonald's worker or miner or the like. And the fact that one is producing more leads to being able to demand greater income.

We also err in considering people (or households) as being high-income or low-income, as if this were a static condition. In fact, at least in America, there is pretty good opportunity for income mobility. I don't have stats at my fingertips, but a really large portion of those in the top quintile have spent time near the bottom. It's a mistake to believe that someone is just "a rich person" or just "a poor person", since there's significant migration between those groups (at least relative to much of the rest of the world).

You'll note that the rise in income inequality seems correlated with the rise in the power of the federal government (as opposed to the state and local authorities). I assume you've heard Lord Acton's Dictum: "Power corrupts. Absolute power corrupts absolutely." Well, he said another interesting thing. He said (sorry that I don't have the actual text here) that democracy tends to concentrate power into the hands of an elite few, and that the only known solution is a strong federalist system, in which the central government is kept weak by power residing in the hands of the states. Thus, it seems that the rise of a strong central government that we've seen over the past, say, 3/4 century, may be related to the rise of a privileged oligopoly. If so, it's clear that looking for a solution by giving that central government additional power is the opposite of the best answer.

[guelo]

> You'll note that the rise in income inequality seems correlated with the rise in the power of the federal government (as opposed to the state and local authorities).

Income inequality really took off in the 80s so it is more correlated with the rise of the conservative movement ushered in by Reagan. Reagan started the trend of deficit-financed tax cuts for the wealthy that continues today.

As far as the power of the federal government, it doesn't matter, the federal government is a wholly owned subsidiary of Wall Street at this point. Both Democrats and Republicans go begging hat in hand and do the bidding of their true masters in Wall Street.

[CWuestefeld]

Income inequality really took off in the 80s so it is more correlated with ... the trend of deficit-financed tax cuts for the wealthy

This just doesn't make sense. The discussion is about inequality of income. Taxation doesn't change my taxable income. It takes away part of my income (and gives much of that slice to someone else).

The tax cuts you're complaining about are assessed after the income level has already been determined. That is, the salary number on my pay stub is significantly higher than many other Americans. Even if the marginal rate were cranked up to 90%, the fact remains that my taxable income is much higher than many others.

Both Democrats and Republicans go begging hat in hand and do the bidding of their true masters in Wall Street.

The bankers aren't angels, no argument from me here. But you're painting an absurdly one-sided picture. Why do you think it is that the bankers need the bureaucrats to "do their bidding"? It's because those politicians really do hold the power! It's true that the bankers are corrupting our democratic process by looking for favors. But it's equally true that the politicians are corrupting our democratic process by selling favors.

And from what I've been able to read from these Occupiers (and I grant that this is just my impression, and I may be wrong), it seems like the ire is directed at those bankers, and that they are looking for the government to help redress the problem. But the government is part of the problem. In particular, they're using their regulatory power as a weapon, hurting us by granting favors to privileged parties. Why would we want to increase the power of that weapon -- ask them to do even more regulating -- when that power is what's enabling the mischief? The only sane answer is to take away their weapon.

[guelo]

The tax cuts of the last 30 years have been accompanied by massive deregulation and cuts to social services. Society has taken a huge right-ward tilt, conservatives have gotten everything they wanted. But you guys can never get enough and are always claiming that we need more tax cuts, more deregulation and more cuts to social services. The deficits created by the tax cuts during Republican administrations are used to demand cuts to social services during Democrat ones. It's happening now under Obama, even though conservatives are in a panic over supposed socialism there have been huge cuts at state and local levels, Federal government has shed half a million jobs [1], and Obama has been negotiating trillions of dollars in cuts to Medicare.

We are living in your vision of the world. And it is awful. Corporations and banks have totally corrupted our democracy, so yes, Washington D.C. is useless. But the bankers are the source of the problems. They are a blood sucking squid on humanity's face.

When all the banks failed a few years ago it was a great opportunity to break them apart, too big to fail should be too big to exist. But instead we were all told, by both Democrats and Republicans, that if we didn't save them it would supposedly plunge us into the worst economy since the great depression. So tax payers gave them the free money and propped them up but we still got the worst economy since the great depression. And NOT A SINGLE BANKER WAS FIRED OR PROSECUTED, even though there has been tons of documentation of fraud. The government is in their back pocket, they do as they want.

[1] http://thinkprogress.org/yglesias/2011/07/08/263588/the-cons... The peak is for census jobs

[CWuestefeld]

The tax cuts of the last 30 years have been accompanied by massive deregulation and cuts to social services. Society has taken a huge right-ward tilt, conservatives have gotten everything they wanted.

Sigh. We just got the biggest increase in entitlement programs in more than two generations. The government claims it's cutting spending, but actually it won't be any smaller, they've only decelerate slightly. In the meantime, the regulatory state is thriving. I challenge you to name an industry that one could safely enter without needing to learn myriad details of what the government demands of businesses in that industry. This is not an age of deregulation, and GWB was no friend of small government nor of the free market.

NOT A SINGLE BANKER WAS FIRED OR PROSECUTED, ... The government is in their back pocket, they do as they want.

The banking meltdown was due to the banking industry taking some unconscionable risks, but it was also due to the regulators themselves pushing the banking industry to take risks. Industry is also in the back pocket of the government, as business leaders vie for the advantages that government bequeaths. Yet how many politicians and bureaucrats have been held accountable for the debacle?

We are living in your vision of the world.

You have no idea how wrong you are. You seem to be drawing a mental picture of the political world that follows the narrative told by the main stream media, but that's so gross an oversimplification as to be useless. The political spectrum is not one of Liberals versus Conservatives. So when you assume that, because I'm arguing against your Liberal stance, I must be a Conservative, is just plain wrong.

There are many ways to look at the political world. Taking the simplistic view is not going to help you solve any problems, any more than you'll be able to debug your software if you don't understand how the machine, your compiler, the network protocols, etc., work.

First, you should understand that the vast majority of the people in politics and in the business world are not evil. They are just people like you and I, responding to the problems and incentives in front of them, trying to make a life for themselves and their families. The size and complexity of the system makes it less clear where the line between right and wrong is, and easy to fudge for any particular action. While the structure of the system today makes it all too compelling to make the wrong choice.

Your insistence that so many of your neighbors are evil -- when they know that they're not, and just doing their best -- is going to make anyone you disagree with defensive. That'll prevent you from changing any minds, and instead just widen the political chasm that we suffer from today. I beg you, take a step back from the incrimination, and try to understand what's going on as the collective work of many individuals, each responding to situations put in front of them.