In the 1980s, the two best basketball players were Larry Bird and Magic Johnson. They made a lot of money and a lot more money than the people in the stands watching them. Now let’s come to the present, when LeBron James and Kevin Durant make a lot more money than the people in the stands. The gap between the best basketball players’ salaries and the average fan salary is bigger than it used to be, because basketball is more popular today than it was 30–40 years ago. But note that Larry Bird and Magic Johnson didn’t get those gains. Basketball players have gotten richer over time relative to their fans, but also relative to past basketball players. The bottom half is not static over time, and the 1 percent is not static over time. So when we use the snapshot model and say, “The top 1 percent has gotten all the gains”—they’re not the same people!
There is much more in the interview.
As a response to attacks on capitalism, this is incredibly lame and unconvincing. For one thing, basing a defense of capitalism on superstar professional athletes – a trivially microscopic percentage of the population – is silly.
A better defense of capitalism would acknowledge that, over the last 40 years or so, choices made by the government and corporate management have combined to skew the distribution of income even more in favor of the top 20 or 10 percent than was true in midcentury (BTW, I’m pretty sure a person who was in the top 10% 30 years ago is likely to be in the top 10% today, if still alive – unless he was a professional athlete!). And perhaps some of those choices weren’t so smart and we should attempt to rectify the errors to the limited extent possible (in an intelligent way, of course, not through Trump’s incoherent blustering over trade).
But instead from sources like Roberts, we get the same sing-song market fundamentalist bromides (similarly, arguments that official income measurements understate all of the previously unavailable “goods” now available to the middle/working class – like the supposedly life-enhancing wonders of flat-screen TVs, smart phones, video games, internet porn, and online sports betting!). This sort of argument convince no one outside the true-believing bubble.
Maybe you don’t consider “flat-screen TVs, smart phones, video games, internet porn, and online sports betting” to be goods, but they are things people show they want in a very sincere way: they are willing to give up money to get them.
Of course, there are lots of things that people are willing to spend money on that I know are not goods and that an enlightened government would forbid: cats, Christmas movies, jewelry, Rolex watches (but I repeat myself), …
Yes, exactly the kind of insightful response I expected.
Thank you. So glad you agree that enlightened people (me and a few others) can decide what things are really worth to people and thus what their real income is.
Don’t worry, I was not suggesting outlawing flat-screen TVs, etc. I just don’t see how the availability of such items – however wonderful as they may be – makes up for the damage inflicted on ordinary Americans by the policy choices made by ingenious political, financial and industrial elites over the last 2 generations or so.
I agree that that is something worth thinking about, as is the whole question of what makes people happy–and how much should happiness matter?
But when I hear someone sounding like “I know best how you should live … and what you want doesn’t matter”, I react badly.
Surely capitalism has its virtues and should be defended. But I worry that the right-wing, or what we might call free marketeers, or Libertarians, is getting horribly out of touch with what is happening on the ground.
More and more apologies for income stratification is not what the right-wing should focus on.
How about a radical reduction of overseas military operations? How about lower taxes on wages? How about eliminating property zoning, which would lower housing costs? How about decriminalization of push-cart and truck vending which would open up thousands and perhaps millions of business opportunities for ordinary Americans? How about a lot more commentary that the Federal Reserve should concentrate on low unemployment rates rather than low inflation rates?
All of the above should be front-burner issues, daily, for free market and libertarian types. Instead we hear more and more chanting that income stratification is okay and open borders for immigrants is wonderful, that the crushing of the US industrial base is actually a positive thanks to free trade, and everybody is doing better than they ever have.
So? You have your choice in 2020 of Sanders or Trump.
The after tax income of the median taxpayer should grow faster than the that of the top 1%, and faster than that of the top 10%, and faster than that of the top 0.1%.
Yes, even if they’re not the same people.
The after tax policy should be looking to have gov’t supported programs that are aimed at greater after tax income growth for the median worker.
Where is the data on how many of the top 0.01% (16k families) were also in the top 0.01% 5 or 10 years ago? I’d bet it is well over 50% for 10 years ago, so for more than half it IS the same people.
The data might well show much less, 40%, maybe even 20%. Even with 90% change, that total level going too much to the very top is still a poor total tax & spending set of policies by the gov’t.
Reducing mergers, and encouraging huge corporations to break up would reduce this income inequality, perhaps by treating debt as worse than equity for tax purposes. Especially for financial firms. But this is a “how” wonky paragraph. The “what” above is key — median worker income should grow faster than the income level of the top 1%.
I think that the brief write-up of the interview has a bad premise. The problems of the middle-class are perhaps best catalogued in Charles Murray’s “Coming Apart”. It is the social breakdown, the divorces, the kids born of wedlock, drinking, drugs, and retreat from participation in religious, civic, and fraternal organizations that are the big problems of the working class and increasingly the middle class. To say that maybe some people who were at one point middle class have more money now is to entirely miss the point. Most don’t, and even if they did, family and community are way, way more important for a fulfilling life then the money.
Nearly all financial problems could be solved if family members could form large households (without being at each others throats) and get along with their neighbors (without fighting).
I found C.S. Lewis’s view of hell in The Great Divorce pretty compelling. He said that hell wasn’t a place where people were punished, but where people couldn’t get along with each other quarreled and moved further and further apart until each was all alone.
…moved further and further apart until each was all alone.
Interesting; seems modern life indulges this: hikikomori; snowflakes demanding “safe spaces”; various social bubbles.
Warren, Buffet and Gates have been the same people for 30 years, as are about 200 others around the world. That is a long time, equal to about 3/4 of a career.
Free market advocates have to grapple with the fact that they need a common sense explanation for how markets can reduce the real price of housing, education, and healthcare.
The points about the improvements in manufactured goods are real and often overlooked, but as of now they are outside the Overton Window. I doubt that’s going to change in the foreseeable future. Making points about these item to defend neoliberal policy agendas aren’t going to work, even if they’re correct.
Free market advocates have lots of ways that “markets can reduce the real price of housing, education, and health care”. The problem is that none of them are Pareto superior. In all of them, somebody (and somebodies) will come out with less.
The easy way to reduce the price of housing is to build more. But that means turning low density neighborhoods into high density neighborhoods, which hardly anyone living there wants. And when housing prices go down, people who own housing won’t get as much when they sell, something none of them want.
Productivity improvements are a real thing and mostly Pareto Effficient.
At one point not too long ago, 90% of people had to work in agriculture to keep everybody fed. Now it’s more like 2%. Tremendous productivity improvements. But those improvements meant lots of people had to find new livelihoods, live in new places, learn new ways to live. A lot of people had a lot of disutility.
Now, this process was basically Hicks/Kaldor superior but that’s a very different thing.
In fact, almost as a matter of definition, productivity improvement means some people are no longer needed.
I think that turning low density suburbs into streetcar suburbs would do the trick in most metros, but even that goes beyond what most people want.
When the subway came to Owings Mills, MD the Farm Rate at the local high school went from 8% to 58% in a generation. It went from a good middle class school district with affordable homes to ranked 11th in the state (as in 89% of high schools are better). Property values plummeted and crime increased.
Would the residents of Owings Mills not have been smart to oppose the subway and apartment buildings? It doesn’t seem irrational to me.
If you can’t offer people some reasonable assurance that either that won’t happen or they will be generously compensated, you are never going to see an end to stiff resistance.
The name Owings Mills brings back frustrating memories of listening to the Serial podcast. Does this mean your magnet school was Woodlawn? The podcast mentioned that Jay (from the story) took the bus but I don’t remember any mention of a subway/train system in the region.
Is there already a good Orwell-like term for this mouthful?:
“The species of subtle intellectual fraud wherein advocacy is intentionally undertaken in an asymmetric manner and as if an actually existing and crucial “elephant in the room” was not just undiscussable, but did not in fact exist, unfairly leveraging that inadmissibility and unacknowledgeability strategically to ensure an underhanded win by manipulating the framework and limits of debate away from actual reality, through ensuring their opponents are threatened with pariah status for breaking the taboo, and thus put in a position as if they are fighting blindfolded and with one hand tied behind their backs?”
In trials, the “exclusionary rule” is a prophylactic rule which tosses out true evidence when obtained in an forbidden or unacceptable manner. So maybe, “Exclusionary Advocacy”.
Maybe more martial metaphors, “excluded terrain advocacy”, “minefield defended advocacy”. Needs some modifier to emphasize the impropriety.
Luckily, I didn’t grow up in Baltimore. I moved there after college for a job before knowing the score on blacks. I’m happy to finally be leaving this place in six months or so.
If there is one piece of advice I can give its that places you move to in your early/mid 20s are stickier then you think. I thought it was just a starter job and didn’t think much about where I was moving. But the people you meet at your first job get you your second job, etc. You make friends. Find a spouse. They themselves have ties to the area. It’s harder to move on than you think.
Owings Mills is on the highway. In the immediate post-civil rights era it was a focus for middle class white flight that couldn’t afford to live on the more expensive “white L” that ran along I-83. Eventually the lower prices, section 8, and building of the subway station in 1987 attracted blacks from west Baltimore who went on to trash the place.
There is also a lesson here in that Owings Mills was a blacker part of the county even back in the semi-segregation days. Before the explosion I mentioned there was a minority core of middle class blacks in the area. About the right level and nature of diversity libs like to see (say 10-20% black but majority middle class economically). However, such people have family and neighbors who aren’t as upscale as them, and they inevitably cluster, so when blacks wanted to move to the county they tended to move where there are already some blacks. A similar effect has been happening in Columbia, MD, which started as a planned integrated community with the exact level of middle class blacks that whites like to see, but inevitably enough cheaper rental housing was build that the local schools (Wilde Lake) are going to hell. This resulted in a huge redistricting battle recently.
There is a creepy semi abandoned mall in the area where they clearly thought that it was going to become a middle class white commuter suburb but instead it went to hell. It’s been many years since I went but it was 80% vacant last time I was there.
This is also the area that my friends Mom that had four kids and adopted five diverse kids with disabilities and was called a Nazi by one of her adopted disabled kids for voting Trump is from.
asdf says:
This is very true. We may disagree on the causes of and remedies for pathological communities but I would never promote such communities as a healthy place to live. I wish you and your family well in your future community.
Yes and no.
If you look at who is earning the minimum wage it is not the same people in 1990 and 2020. Obviously,many of the ones making the minimum wage in 1990 have aged into someone else.
But it you look at the socioeconomic characteristics of the group of people making the minimum wage in 1990 and in 2020 they will be virtually identical. So to a certain extent they are the same people.
So the argument is really about what do you mean when you say they are not the same people. Yes, I bet you can find an example of a 50 year old who has been making the minimum wage for 30 years. But it will be so unusual that it is of no economic significance.
The same of the top 1%. The CEO or top sports person will change completely over that time frame. But the top 1% in 2020 will have almost the identical social-economic characteristics as the top 1% did in 1990.
So tell me exactly what do you mean when you tell me they are not the same people.