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View Diary: Graphing Rising Income Inequality, the Trademark of Neoliberalism (282 comments)

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    bubbanomics, TomP, Catte Nappe, kevinpdx, Garrett, Pluto, blueoasis, eztempo, WheninRome, Marie, Mindmover, Mnemosyne, samfish, pat bunny, alizard, Lorikeet, jarbyus, Claudius Bombarnac, Funkygal, Roger Fox, farlefty, HCKAD, irate, DRo, mkor7, Grandma Susie, Athenian, Egalitare, angelajean, gulfgal98, banjolele, TampaCPA, Yellow Canary, monkeybrainpolitics, CT Hank, Nance, cosmic debris, bronte17, Matt Z, Azazello, Dallasdoc, Floande, dle2GA, temptxan, Naniboujou, Florene, ewmorr, lostinamerica, TexasTom, vets74, Robobagpiper, The Lone Apple, maryabein, greenbastard, hazzcon, Blue Wind, Kinak, PhilJD, OregonOak, Ohkwai, SJerseyIndy, Bule Betawi, PrahaPartizan, polecat, disrael, angstall, emal, Richard Cranium, Michael91, MartyM, bluestatedem84, marina, wader, Blueslide, ybruti, m00finsan, dotsright, Trial Lawyer Richard, zerelda, CTPatriot, SunsetMagnolia, blue aardvark, your neighbor, jamess, theunreasonableHUman, Xapulin, ohmyheck, shaharazade, Onomastic, RASalvatore, allie123, caul, Oye Sancho, TealTerror, cybrestrike, importer, kck, roses, kamarvt, CrissieP, dark daze, supercereal, On The Bus, MrJayTee, freesia, pot, SethRightmer, Preston S, SwedishJewfish, rudy23, dmhlt 66, m16eib, sostos, Son of a Cat, scott5js, chipmo, hester, roadbear, Tommymac, Thutmose V, KMc, caliQ, wxorknot, quagmiremonkey, Satya1, happymisanthropy, maxzj05, MJ via Chicago, justme, nanorich, cpresley, vahana, Cassiodorus, Isara, profh, johnmorris, IndieGuy, Renee, middleagedhousewife, DoctorWho, itsbenj, divineorder, DorothyT, triv33, glitterscale, millwood, bluicebank, Emocrat, Angela Quattrano, willibro, Gowrie Gal, gooderservice, Williston Barrett, miguelmas1, priceman, Sun Tzu, Shockwave, zedaker, PhilW, ocular sinister, dan667, Anthony Page aka SecondComing, jennylind, Uberbah, Involuntary Exile, Moderation, LeighAnn, MKinTN, yoduuuh do or do not, Simplify, Lefty Coaster, Chi, Garfnobl, Bill Roberts, historicalagent, Eric Nelson, kurt, Liberal Thinking, AspenFern, Desolations Angel, JesseCW

    I don't know half of you half as well as I should like, and I like less than half of you half as well as you deserve. ||@totushek on twitter

    by tote on Thu Aug 18, 2011 at 03:00:49 PM PDT

    •  Well done. (17+ / 0-)

      1.) You could combine this sociological approach with Welfare Economics, which offers microeconomic tools for analyzing the various income flows. Pareto Distribution in wiki. Paul Krugman -- as usual -- is the guy to go to for a balanced read on applying these tools: "(Contrary to Benanke claiming that skills drove income inequality...)  income at the 99th percentile rose 87 percent; income at the 99.9th percentile rose 181 percent; and income at the 99.99th percentile rose 497 percent. No, that's not a misprint." Krugman does Graduates Versus Oligarchs in 2006.

      2.) Over the last decade Richard Koo at Nomura has pioneered the use of detailed balance sheet figures. His work addresses the transaction and debt characteristics for every single mid- to large-scale business is a national economy. He has put both Keynes ("Salt Water") and Friedman ("Fresh Water") economic thinking in context. Koo's approach can be expanded to include households -- aggregated statistics for personal banking and debt serve quite well enough.

      3.) My own work looks at capitalism's vulnerability to class-based theft events. Between these crime sprees:
      -- The falsely advertised Reagan and Bush tax giveaways
      -- Big Bubble I and II free-money-to-bankers-and-their friends giveaways engineered by The Fed, and
      -- Lending fraud carried out with dishonest regular mortgages, illegally prepared A.R.M. mortgages, credit card scammery and other related crimes...

      Some $17-trillion has been transferred in detailed/documented transactions and debt contracts away from the Middle Class -- over to the Top 1% by asset holdings. Yep, $17-trillion stolen in 30 years and in an economy that's asset-valued at $55-trillion total..

      Helluva smash-n-grab, that'n. The Russian drug gangs/Asian Triads/Mafia are nothing compared to it. Next to none of this thievery is getting prosecuted -- welcome to the George Anderson Era. (Get drunk at a Rangers game in 2008, go 60 m.p.h. up Water Street in Manhattan, DUI slaughter a gal hailing a cab... serve two weeks and pay $350. That's today's Wall Street.)

      Angry White Males + Crooks + Personality Disorder psychos + KKKwannabes + "Unborn Child" church folk =EQ= The Republicans

      by vets74 on Fri Aug 19, 2011 at 06:40:01 AM PDT

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      •  I wouldn't know how to incorporate (6+ / 0-)

        Pareto optimalization with gini statistics into a good argument about welfare economics, except to the simplified point that we could probably boost welfare spending without taking away from anyone else if we measured everything in units of welfare, something like the human development index or something. Is that what you meant? Sorry I'm not an economist by training. I do stats on alliances and treaty negotiations, that sort of thing. But I have taken internediate classes in econ and have a heart.

        That is a great area of work that needs to get more attention from the media. The whole idea of fictitious capital that floats around in the system, collapses in a heap, and is then recapitalized with tax payer dollars is the greatest crime of, well MY lifetime anyways. keep up the good work. And hopefully share some of your findings soon.

        I don't know half of you half as well as I should like, and I like less than half of you half as well as you deserve. ||@totushek on twitter

        by tote on Fri Aug 19, 2011 at 09:04:55 AM PDT

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        •  Let's get you going on where macroeconomics (1+ / 0-)
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          stands, today. # 1 book and not a text book:

          The Holy Grail of Macroeconomics, Revised Edition: Lessons from Japans Great Recession -- Dr. Richard Koo

          This is nobody's idea of a one-sitting beach book. You'll need a couple weeks to go through it. But the explanations are straightforward -- not mathematical.

          Our 1929, the Japanese early 1990s, us again in 2008 -- all are Balance Sheet Recessions.

          The 1929 Great Depression didn't end until WW II, but it was easing off substantially as the debt overhangs of 1929 (and added overhangs from Hoover/Mellon blunders 1929-1932) were slowly repaired.

          The lessons of the book are demonstrated with the Japanese data.

          Our 2008 disaster is different in part because personal economics are much worse off than business economics. Households are the problem, now, not the businesses.

          Holy Grail is a solid basis for seeing how macroeconomics ties in with public policy. Koo is also up on YouTube. You'll find a couple of diaries on Koo's work if you look through my page at DKOS.

          Angry White Males + Crooks + Personality Disorder psychos + KKKwannabes + "Unborn Child" church folk =EQ= The Republicans

          by vets74 on Fri Aug 19, 2011 at 11:02:51 AM PDT

          [ Parent ]

    •  Agree or disagree (11+ / 0-)

      i think your diary stands as a model of a thoughtful, well researched, and civil writing we could all do to take as an example.   Thank you for your craftsmanship

      Intelligent, passionate, perceptive people will always disagree, but we should not let that disagreement, however heartfelt, lead us to become deaf to those better angels of our nature.

      by Mindful Nature on Fri Aug 19, 2011 at 07:51:58 AM PDT

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    •  What is the origin of this word "neoliberalism"? (1+ / 0-)
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      Call it free market, supply side, libertarian bullshit! Washington consensus. The word neoliberalism seems too easy to attack the underlying, only models of Keynes that we know work. The word confuses!

      I'll say it again. The word neoliberalism is an overly intellectual word and it confuses people! The target is free market, Chicago, supply side, libertarian, bastardized Keynesianism.

      So fine here is your pat on the back by a new group think trend to blab about "neoliberalism".

    •  No seriously, corporatism wan't sensational enough (0+ / 0-)

      So if you say neoliberlism that is new and will get more attention?

    •  Well done (5+ / 0-)

      I do NOT agree with Krugman's dismissal of globalization of the cause of this.  There is another set of graphs I would add here.  They are from the IMF (ironically) in 2008.  They chart the % of income going to labor.

      A ouple of things to note:
      1.  Rising inequality is a problem everywhere in the industrialized West.  It is obvious that the balance of power between labor and capital is changing everywhere.
      2.  This is a systemic crisis.


      The bitter truth of deep inequality has been disguised by an era of cheap imported goods and the anyone-can-make-it celebrity myth - Polly Toynbee

      by fladem on Fri Aug 19, 2011 at 10:23:00 AM PDT

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      •  Yeah, inequality in the UK has risen (1+ / 0-)
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        since 1980, by about half as much as the US. But France is still where we were in the 60's, though there are some hints of creeping inequality in the most recent noise.

        I didn't really agree with that statement either. I think it's clear that this has been a global process and we all know that the Washington Consensus was a global consensus (you know, the rich parts of the globe). I think the answer as to why is that Krugman doesn't want to accept the neoliberal frame. By focusing on the extreme Gini here. He does have a point; whatever gnarly project is afoot, it wouldn't be here without the movement conservatives. David Harvey's book a brief history of Neoliberalism sorts out the connection with the term and movement/neoconservatism.

        But let's face it, economists, including Krugman, are generally more liberal in the libertarian sense than, say, Kofi Annan. That is because they believe in efficient markets making everyone better off. This is fundamentally untilitarian, in that it emphasizes freedom to be well, rather than deontological arguments such as the idea of inalienble rights, yes I'll say it, entitlements. Then again, Krugman has always been a fan of Europe, so when they started the process of welfare retrenchment, I don't know where he stood.

        Now, though, he's clearly a more rights-based economist, as his book The Conscience of a Liberal makes abundantly clear.. But obviously I agree with the Global take, I spent the whole diary showing it. I may not have gone enough into the different regional and state-based cases, but suffice it to say that Global inequality has been rising everywhere. Not just America.


        I don't know half of you half as well as I should like, and I like less than half of you half as well as you deserve. ||@totushek on twitter

        by tote on Fri Aug 19, 2011 at 04:18:14 PM PDT

        [ Parent ]

    •  I would like to address the meat of your argument (10+ / 0-)

      namely, here:

      What this implies is that because during the Clinton and Obama administrations there were no marked differences in Global or domestic income inequality, there is little measurable difference to be expected from the rule of either major party with regard to income inequality, not to mention all the other neoliberal policy priorites, like privatization, especially of prisons and schools, the weakening of organized labor, the degradation of the environment, etc. This is hardly surprising when you think about where the major campaign contributions for both parties come from. All this strongly suggests that a new, mega-rich socio-economic class consisting of the titans of global industry and finance has emerged, and their relative power over ours ensures the trends stay roughly the same, leading to 2 possible catastrophes: A. further environmental degredation to the point of crisis and B. increasingly severe economic crises due mainly to a lack of effective demand. Either one of these could be the WWIII-like event that breaks the cycle, but at what cost? Does everyone understand how horrible WWIII was?

      This is the "money quote" from your text.  Capital is in charge, both of economy and of the political apparatus, and so the contradictions of capitalism are left alone to sharpen themselves indefinitely, with dire consequences for that vast majority of us not in the owning class.

      Your idea of a solution, however, seems to be predicted on the notion that some sort of World War III will be necessary to pull us out of the Great Recession just as World War II pulled us out of the Great Depression.  This is good thinking, but it leans too heavily on the notion that the future will be like the past.  Here I would like to suggest that the current crisis is fundamentally different than the one that afflicted the Great Depression, and so it will have to be resolved in a different manner.

      The theoretical background for what I'm about to say here, can be read in the essays of Jason W. Moore, most of them conveniently available online.  Moore is an environmental historian -- he charts the rise of the capitalist system as a series of changes in the relationship between society and nature.  Moore makes a critical distinction between the "developmental crises" of an economic system (primarily, capitalism), in which a crisis forces the further expansion of the system, and "epochal crises," in which an economic system (in this case, capitalism, but in the 14th century this applied to feudalism in Europe) has developed as far as it can go, and so the crisis clears the ground for whatever system will develop next.

      To all appearances, then, there will be no World War III to set the stage for future global capitalist prosperity, because this isn't a developmental crisis.  This is so because the era of cheap resources is over and because technology can no longer bring the era of cheap resources back to life.  (Technology does other great things instead now.)

      Rather, the breakdown of the system awaits, clearing the ground for the emergence of a post-capitalist order.

      "In any event, it is safe to assume that the ends of capitalism will be as unprecedented as everything else about it has been." -- Gopal Balakrishnan

      by Cassiodorus on Fri Aug 19, 2011 at 10:29:06 AM PDT

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      •  I have to run out for a few hours. But expect (2+ / 0-)
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        Cassiodorus, TomP

        a full response to this when I come back.

        I don't know half of you half as well as I should like, and I like less than half of you half as well as you deserve. ||@totushek on twitter

        by tote on Fri Aug 19, 2011 at 10:33:12 AM PDT

        [ Parent ]

      •  Yeah, I think that's a fair point. (1+ / 0-)
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        I have to read this guy. I have wanted to understand more about the nitty gritty implications of THAT limit to capitalism for some time. I guess that rare earths are going to go first, but we also just found out that we're almost out of Helium. Surely sooner than later it will be the really good stuff. I have done a lot of work on Geoplotics. I think we're 50 years away from peak oil. So I guess my limited perspective causes me to look at that as the inflection point for the limit of the environment to take control. But when it DOES, you're right, it can't be transcended like other barriers (unruly labor, etc). Plus, maybe environmental catastrophe's like Fukushima have the ultimate effect of spiriting that inflection point ahead in time. Either way, 50 years is not long, and thus the turn to Frack. Peak gas is 100 years. !00 years is not a long time when you think about the massive transition our economy needs to make.

        Good food for thought, and a very sharp, insightful reading of my main argument. Thank you!

        I don't know half of you half as well as I should like, and I like less than half of you half as well as you deserve. ||@totushek on twitter

        by tote on Fri Aug 19, 2011 at 04:28:36 PM PDT

        [ Parent ]

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