I recently wrote about the increasing American wealth gap here and here, but I never get tired of pointing out the stubbornness of class warfarists, so I’m giving it another go.
Americans everywhere should be celebrating, rather than bemoaning the findings of a recent study by the Center on Budget and Policy Priorities (CBPP) that shows that the gap between the wealthy and the poor has increased over the last thirty years.
Why celebrate? Because the study also shows that all classes of Americans have improved their financial condition since 1979.
Here’s the CBPP chart:
| Table 1: Average After-Tax Income by Income Group 1979 – 2007 (in 2007 dollars) |
||||
| Income Category | 1979 | 2007 | Percent Change 1979-2007 |
Dollar Change 1979-2007 |
| Lowest fifth | $15,300 | $17,700 | 16% | $2,400 |
| Second fifth | $31,000 | $38,000 | 23% | $7,000 |
| Middle fifth | $44,100 | $55,300 | 25% | $11,200 |
| Fourth fifth | $57,700 | $77,700 | 35% | $20,000 |
| Top fifth | $101,700 | $198,300 | 95% | $96,600 |
| Top 1 Percent | $346,600 | $1,319,700 | 281% | $973,100 |
| Source: Congressional Budget Office, Effective Federal Tax Rates: 1979-2007, June 2010. | ||||
Sadly, but predictably, the anti-rich left, rather than being joyful that all canoes have lifted, are consumed with grief that the yachts have not sunk.
But this, my friends, is no honorable grief, but one borne of envy and class hatred.
Unless and until the rich experience a significant decline in their own incomes, no amount of increase in the incomes of the poor and the middle class will assuage the class warmongers.
And Stalin, Mao and Che will be playing ice hockey in hell before anti-capitalists will ever admit that supply-side economics works and that when the rich get richer so do everyone else.
9 responses so far ↓
1 Nosey // Jul 11, 2010 at 12:19 pm
A few thoughts:
The first is that this information shows absolutely nothing about class mobility. If people can move from income category to income category fairly easily, then income disparity between classes is irrelevant.
The second is that you missed a key question to ask. The poor are getting richer, in absolute terms. Supply-side economics works; does it work better, though?
2 James Nye // Jul 11, 2010 at 12:19 pm
This post would make just as much sense if the lowest fifth’s real income had instead increased by ten percent, or one percent, or even one dollar. Unless you can argue that the top 1% are working 281% harder than they did in 1979, or the market is 281% more efficient at allocating the fruits of their labor, this chart should be cause for alarm.
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4 Peter // Jul 11, 2010 at 5:14 pm
James,
Thanks for visiting.
My hunch is not that the rich worked harder, but that they worked smarter.
But the good news is that when the rich do work smarter and make more money, everyone else does too.
In any case, I just want us to stop the class envy and start applauding people who create jobs. We can learn a lot from them.
By the way, I would like to see some statistics on how many new jobs were created by that noxious 281% increase in the incomes of the rich.
I bet it’s more than a few non-census jobs.
5 Peter // Jul 11, 2010 at 5:18 pm
Nosely,
Excellent observation.
In 1979 I was one of the people in the lowest quintile. College students, young people, people just starting out in their careers may have low incomes, but that doesn’t mean they aren’t upwardly mobile.
Supply-side economics may not work better than Keynesian economics, but it shouldn’t be dismissed out of hand. It should be seriously discussed.
The real question – thankfully, it’s finally being asked in Europe by people like Angela Merkel – is whether the big spending policies of Keynesianism work.
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