"Although most U.S. income inequality research is based on public use March CPS data, a new wave of research using IRS tax return data reports substantially faster inequality growth for recent years. We show that these apparently inconsistent estimates are largely reconciled when the income distribution and inequality are defined the same way. Using internal CPS data for 1967 to 2006, we show that CPS-based estimates of top income shares are similar to IRS data-based estimates reported by Piketty and Saez (2003). Our results imply that income inequality changes since 1993 are largely driven by changes in incomes of the top 1%."

Wilkinson [excuse me, "W.W."] is no idiot, but look at what his commitments are forcing him into here: he's allying himself with someone whose racial politics _he_ describes as "toxic", and endorsing inherited privilege because reasons, that's why. In other words, he's agreeing with Flynn that meritocracy is sociologically incoherent, and embracing its devolution into aristocracy, if it can be used to upset enough liberals, and ennoble enough proles to damp down unrest.

Bloomberg?!?

It's as though they look at public choice theory and see a blueprint not a critique.

"There is no plausible way based on these data in which elites can be considered a Democratic voting bloc. To create a group of strongly Democratic-leaning elite whites using these graphs, you would need to consider only postgraduates (no simple college grads included, even if they have achieved social and financial success), and you have to go down to the below-$75,000 level of family income, which hardly seems like the American elites to me."

"So here’s a riddle: which form of technology should we prefer, labor saving or labor complementary? Labor saving technology is consistent with high wages and tight labor markets. But it also, of course, leads to less jobs overall in the sectors where it is deployed. Which brings us back to the homeless people with hotspots. Let’s imagine, for the sake of argument, that this is a legitimately profit-making business venture rather than a weird kind of charity. (And note that even as charity, the project depends on its consumers viewing it as a kind of legitimate business, a way for the homeless to engage in “productive” labor.) Putting hotspots on homeless people has to count as a labor complementary technology. From the standpoint of the wireless company, the marginal product of a homeless person’s labor is much higher (i.e., it’s non-zero) once you’ve figured out that you can attach hotspots to them. So if you think that it’s bad when machines replace human labor (which is not what I think), then this is just the kind of technical change you should prefer.
"But labor complementary technology doesn’t necessarily look so great once you’re face-to-face with the kind of labor it complements. In this case, it relies upon the existence of a cheap and exploitable labor force—something that’s obvious when you’re looking at a homeless person in a creepy t-shirt, less so when you order from an online retailer. And here’s where I think a lot of the outrage over homeless-people-as-infrastructure goes wrong.
"I don’t recall seeing a lot of complaints about the problem of homelessness in Austin prior to this story. Which I don’t mean as some kind of “gotcha”—the world is full of horrible things, and it’s neither possible nor particularly helpful to try to talk about all of them all of the time. But to get up in arms about an ad agency exploiting the homeless as wifi routers strikes me as a peculiarly half-assed form of outrage. If they weren’t walking around as billboards for wireless service, Austin’s homeless and poor would still be homeless and perhaps a bit more poor. The fundamental problem here is not exploitation, but the condition of possibility for that exploitation, which is the fact that there are so many poor and homeless Americans in the first place.
"“The misery of being exploited by capitalists is nothing compared to the misery of not being exploited at all”, goes the old adage from Joan Robinson. Then again, says Marx, “to be a productive laborer is not a piece of luck, but a misfortune. In the short run, labor complementary technology may employ more people, which is better than them not being exploited at all. But in the long run, the jobs thus created tend to be terrible, and our real goal ought to be to channel technical change toward labor saving innovation.
"This leaves us with the question of what the homeless of Austin can demand, if not the right to be walking 4G hotspots. Fortunately there is a simple solution to that. There’s nothing (economically) stopping us from just giving people cash; and as the housing activist Max Rameau likes to say, the cause of homelessness is that people don’t have homes, and we have plenty of those. So imagine what would happen if this pool of cheap, easily exploitable labor wasn’t available. A company that wanted to sell 4G wireless services might have to invest in more transmitters to fulfill demand. Or perhaps they would deploy robots to roll around the streets selling wireless access! This would not employ as many people, since it’s more a labor saving than a labor complementary technology. But it also wouldn’t create the grotesque spectacle of fellow human beings serving as pieces of infrastructure."

"Aaaaaaand that’s then I want to start pressing the “It’s time for the goddamned revolution” button. By the time we get to the breakdowns of the monthly expenses of the seven 1% households profiled for the article, which features line items like $800 a month on wine and $1200 for the vacation house on the lake, I’m vaguely surprised Toronto isn’t on fire. The only people I feel any sort of commonality with are the immigrant family, who pack their own lunches for work and aside from the hair salon line item seem to have some perspective on their cash. The retired couple who invested well and are living off the proceeds also gets a pass, because, hey, that’s the goal, right? Otherwise: Purification by flame."

"To understand what Murray does in Coming Apart, imagine this analogy: A social scientist visits a Gulf Coast town. He notices that the houses near the water have all been smashed and shattered. The former occupants now live in tents and FEMA trailers. The social scientist writes a report: 'The evidence strongly shows that living in houses is better for children and families than living in tents and trailers. The people on the waterfront are irresponsibly subjecting their children to unacceptable conditions.'
"When he publishes his report, somebody points out: "You know, there was a hurricane here last week." The social scientist shrugs off the criticism with the reply, "I'm writing about housing, not weather." "

---All parts of Frum's review are worth reading.

"Fukuyama's would-be allies in the business world haven't developed what you could call a coherent plan of attack. They have relatively little to say about the political side of the changes they seek. But they do have energy, optimism, and something of the utopian spirit that's at the heart of most successful social movements.... In the more obviously troubled circumstances of 2012, the business gurus have toned down the technological determinism a little bit. But they're still trying to point the way to a new, better world. You can call this a hopeful sign or a scary one (that Marx stuff didn't work out so well, remember). In any case, it's worth paying attention to."

Occupy Management Consulting is not going to fly, I think.

"The problem with a rights-based liberalism is precisely that it is not and never can be the end of history, that it is never secure or stable, that every liberty claimed through toil and protest, no matter how acclaimed and cherished and generative, is one day away from the firing line when some powerful interest decides that some right or practice is inconvenient.

"It doesn’t even matter if the end of a right, a freedom, a possibility will ultimately hurt that powerful interest. The contemporary businesses who have registered a powerful stake in exceptionally restrictive monopolies over intellectual property have themselves been enormous beneficiaries of a conception of the public domain as a fundamental and irreversible right of a free society. No matter: they would now see it ended. Better to kill the future than live in a present where you can only have two Ferraris in the driveway."

Of COURSE Amazon sells pepper spray.

"The big gains have gone to the top 0.1 percent. So income inequality in America really is about oligarchs versus everyone else. When the Occupy Wall Street people talk about the 99 percent, they’re actually aiming too low."

(checks table) Yep, this applies.

"You can’t make any sense of American political discourse if you give everyone credit for really wanting what they claim to want. My sense is that there are very few true deficit hawks; the vast majority of those who claim that title are really just using the deficit to pursue the goal of a more unequal society."  Well, yes.

"After five or ten more years, the mess they’re making in public schooling might be so undeniable that they’ll say, “Oops, that didn’t work” and step aside. But the damage might be irreparable: thousands of closed schools, worse conditions in those left open, an extreme degree of “teaching to the test,” demoralized teachers, rampant corruption by private management companies, thousands of failed charter schools, and more low-income kids without a good education. ...All children should have access to a good public school. And public schools should be run by officials who answer to the voters. Gates, Broad, and Walton answer to no one. Tax payers still fund more than 99 percent of the cost of K–12 education. Private foundations should not be setting public policy for them. Private money should not be producing what amounts to false advertising for a faulty product. The imperious overreaching of the Big Three undermines democracy just as surely as it damages public education."

Conversation with Kristina suggests an alternative hypothesis: going to a Big Name school raises your income in every profession; students have a target income level, and would rather do something socially redeeming/fun if it doesn't cost them too much; therefore students who go to Big Name schools don't earn more, on average, but might have a broader range of jobs.  Testable... Anyway, there are obviously big problems of self-selection and self-regulation involved here.

"Between 1947 and 1973, GDP per family increased at a rate of 2.6% per year and median family income grew at 2.7% per year. From 1973 to 2007, GDP per family increased at 1.7% per year, but median family income grew at just 0.7% per year.
And note the absolute numbers: GDP per family rose by $52,000 during 1947-73 and then by $82,000 during 1973-2007. Median family income increased by $26,000 during 1947-73 but then by just $13,000 in 1973-2007.
Median family income was $64,000 in 2007. Had it kept pace with GDP per family since the mid-1970s, it instead would have been around $90,000.
I’m all for helping to accelerate the rate of innovation. But the big change in recent decades lies in the degree to which economic growth lifts middle-class incomes. If we want to understand slow income growth, that should be our focus."

"At long last, then: all this is to not to deny that the rich, many of them, haven’t done impressive things that have in many cases dramatically improved one aspect or another of human experience.

It is to say that they have already been very richly rewarded for their accomplishments, that even the most original of them have reached their happy state within a framework of public goods, owned in common, and paid-for-by-others – and to note that a substantial proportion of them have less reason than others to claim particular personal credit for their fortunate situation.

And that in that context, being obscenely wealthy ought to be its own reward; taxation the fortunate result of success and the down payment made on future prosperity. It is the price owed, not confiscated, to support a system, a government and a society that however imperfectly did and does so much to create the opportunities in which many of these folks got so rich."

Unintended consequences of hubristic social engineering by ideologues (with finance degrees), vol. CCXIV.

Not a group of tags I ever expected to have occasion to type.

Chapter 1 is online, and grimly fascinating in itself.

"The case against Delaware".

Sure. But: "Examined broadly, the history of manual labor in this country doesn't suggest that physical jobs secured more respect by convincing people of their complexity. They secured more respect by unionizing, and thus becoming good, even coveted, positions."

"I packed a backpack and took off for the romantic frontier-land of New Zealand with nothing but $500 and a working visa in my pocket. The six months I spent there were a far cry from what I thought the adventure would be, but it was educational. Culminating in my job at the cardboard factory--where I was surrounded by people who hated their jobs but had no other viable option.

In a flash, I grasped the true value of a college degree. It didn't matter what I majored in. It didn't even matter all that much what my grades were. What mattered was that I got that rectangular piece of paper that said, "Lane Wallace never has to work in a corrugated cardboard factory again.""

This will be an... interesting experiment. (For instance, can they really turn MBAs into math teachers in 3 months?)

all of this has happened before...

Origins of the present troubles. --- Somewhat surprisingly, I mostly agree with this.

Preach it, Brother Yglesias!

"The United States isn’t a poor country dealing with some objective shortfall of national resources. And yet across a whole variety of dimensions—from broadband speed to train quality to the cleanliness of streets to life expectancy to the crime rate—we fall far short of standards that are reached elsewhere. What we do have, on the other hand, is the richest multi-millionaires in the world. And an awful lot of people’s first instinct is to try to explain these things away or explain why it would be impossible to bring some of these quality of life features to the United States. It seems to me people would do better to get more upset."

"Relative to, say, Kentucky, Europe is a continent full of countries featuring better educated, healthier, longer-lived people, with lower poverty rates and dramatically fewer poor children. It isn’t, however, as friendly to the interests of rich people or business managers."

Inequality has risen in America because of political and institutional shifts. (Can you say "class struggle"? I knew you could.) Attempts to pretend that it is due to exogenous economic forces (patterns of trade, returns on education a.k.a. "skill-biased technological change") are at best underinformed, and in the case of people who should know better, such as economists, more likely disingenuous.

"Their combined income of nearly a quarter-million dollars last year was five times the median household income for Wasilla's 7,000 residents. They own a single-engine plane, two boats, two personal watercraft and a half-million-dollar, custom-built home on a lake that is worth three times the average of other homes in town." Ackerman's comment is only too acute: "I look forward to hearing how class should be defined entirely culturally."

"Brooks knows one big thing: that the world can be easily divided into groups (preferably two) and these groups are really, really different for each other. ... Brooks also desperately wants to infer political divisions from sociological divisions."