Okay, so people have been screaming that the Bush administration has wrecked the economy, and the figure by which it has declined for the average American since the dot com boom turns out to be one percent?

One lousy frickin' percent? A penny out of every dollar? This is a depression? This is the ruination and the establishment of oligarchy and every other disastrous thing political drama queens have been screaming about? Bush in '08! He kept us out of feeling any effect from the war!

Personally, mine's down a lot more than 1 percent, but it's also because I decided to stay home with the kids after the dot com boom ended, and I'm not the only dot-commie I know who did that. Is there any adjustment for downshifting in that analysis? I wouldn't be surprised if, once you did that, the economy was actually BETTER than before we were at war and you could no longer raise a million bucks to start a home nori-delivery service (myNori.com).

Not so fast, Max. That penny out of every dollar may mean more to families that live close to the bone than it does to somebody who had the option of more-or-less-voluntarily downshifting.

Also, the bursting of the internet bubble tended to affect those with high incomes, while the current bursting of the housing bubble will tend to affect more of the population.

Do I also remember reading that "inflation" does not fully account for rises in gas & healthcare prices?

What I'm trying to say is that the 1% discussed here, in combination with a few other factors, may be more disastrous for middle/low income families than you'd think.

(Regarding the dotcom bust, though, I do remember visiting friends in San Francisco before, during and after, and noting that after the bust, people seemed strangely happier and more purposeful, talking about doing things they'd always wanted to do rather than trying to keep running after increasingly unlikely wealth. However, it's important to remember that these weren't people in immediate danger of true homelessness, just people coming to grips with the idea that their new career might not provide the yacht they picked out last year.)

" The White House isn’t even trying to make sense on economics."Well, that's not surprising since the White House also doesn't make sense on anything else.Tom

Voluntarily making more money when money is flinging itself at you like a cheap floozy, and going domestic at other times, is a time-honored tradition (ever hear of the Baby Boom? You think Rosie no longer being flush with riveting money and having time on her hands might have had a LITTLE to do with it?)

I can't tell you how many 6 and 7-year-olds my former dot-com colleagues have by now. Everybody went out and had a baby or two, it seemed.

And it's not a net economic hit necessarily-- god knows what I spent on restaurant food in the hectic dot-com days compared to what I save cooking now, and eat better besides.

Of course, that's only a small part of the population, but still, it's striking that folks like the guy who wrote this entry have to focus on inequality because the objective per-household stats just can't be made to look that bad. The word for "one percent down from the high of the previous economic boom" is "economic boom."

Jared, the NYT article doesn't provide any link to the IRS report and I couldn't find the report on the IRS web site. Changes in average income aren't all that informative. The NYT article says that the top 1 percent of income earners accounted for nearly half the income gains in the country. That growth among a small group would skew the average growth upward. This means people in the bottom 99% would have had to have had a larger decline in income than the overall 1% decline. Also, the article mentions that half of all Americans reported earnings of less than $30K and two-thirds reported earnings less than $50K. That is probably the most significant statement, since it shows that a large block of people are earning salaries that seem small relative to the high cost of homes, cars, medical care, etc. . ..

It's nice to know Mgmax, though, can afford not to work. :-)

Statistics always mystified me, but isn't it true that there is no such thing as an "average family"?

If the incomes of the rich go up a whole bunch, and those of the non-rich go down even more, than the "average family" income goes down only a little, right?

This is a useful reminder (and confirmation) of what we've all been saying about equity and the nature of the economic recovery, but it's also useful in suggesting some of Wall Street's concern about the credit bubble. Somehow, consumers had to keep spending. The wealthy can do a lot on their own; witness the continued condo purchases in Manhattan. But they can't do it alone. Barbara Ehrenrich has a cute article in Huffington joking about how rude poor people are to stop paying their debts and spending when needed. 

John 

http://www.haberarts.com/

As other have pointed out the use of averages tends to obscure the picture. Bill Gates and I have an average wealth of $30 billion or so. This doesn't tell you whether I'm worth $1 or $1,000,000. Both get washed out by averaging.

There have been studies that break things down by demographic bands (usually 20% wide). It is well known that the lowest group has gotten poorer and that each successively higher group has done slightly better. The pattern breaks at the top 1% where everything become completely skewed.

Not only has income stagnated, but costs have risen and this means that the effective standard of living has dropped more than the raw numbers show for those in the bottom half. A lot of the pain has been deferred because people have been covering the difference by borrowing. This now seems to be coming to an end. The credit is getting harder to obtain, people are maxed out and the housing boom is over.

The results are inevitable. People will have a lower standard of living and the reduced spending will lead to a recession, which, I believe, has already started.

There is no fix for this. Even if we rejigger the tax code so that the super wealthy pay more the effect on our economy won't be much. I estimate that this could bring in $50 billion a year more in tax revenues. Now compare this with the $500 billion that we spend on militarism and tell me how this small amount is going to correct society's basic problems with underinvestment in infrastructure and social support programs?

I'm all for neo-popularism, but don't expect it to solve the fundamental distortions in our economy.

--- Policies not Politics
Daily Landscape

It seems to me that the underlying question here is whether people should be paid in proportion to what they contribute to the economy or if they should be paid in proportion to their needs.

If you think people should be paid according to their needs, then a strong case can be made thay our system does not adequately redistribute from those who contribute to the economy to those with economic needs.

If you think that people should be paid according to their contribution to the economy, why do you think that the higher income earners have seen higher income growth in recent times? Are they being paid more than they contribute due to some market failure? Is it a conspiracy among the upper class? Is there some reason that lower income people have not found a way to contribute to the economy.

This is a false dichotomy intended to suggest that those at the top, reaping the benefits, deserve it because they contribute to the "economy". Where do you think the products and services that those who "contribute" to the economy (by selling them for a profit) come from? Unless you are a one person business and are paid for your personal labor, those who contibute to the economy are "contributing" the goods made by other's labor. What exactly makes the "contributer" more valuable than those who actually create the products and services?

So you subscribe to the theory of market failure combined with conspiracy among the well off?

What gets me is how little attention income inquality gets amongst Dem. presidential candidates. This is more of the same with respect to this administration and I don't expect big changes in the next year and a half. We need to be demanding policy proposals, or at least outlines of principle, in regard to income inequality from the field of 08 candidates.

Or vice versa. When Jared Bernstein says we all took a $500 hit, and then says that lower-income families may be hurting much more than the 1% suggests (I feel pretty sure no one can accurately perceive a 1% difference in annual income in daily life, any more than you can perceive a 1 degree increase in temperature), the reality could as easily be that lower-income families took no hit at all, and upper-middle-income families like mine took a considerably more substantial hit. (Why do I think that might be the case? Because McDonald's and factory jobs stay pretty much the same over time, but professionals in job-hopping fields tend to see a much more direct boom and bust effect-- I did!)

I'm not claiming this is the case, but let's face it, stories like this often arrive at a conclusion first and find a way to massage the stats to support it later. I'd at least like to see breakouts by a variety of income groups before I claimed I had a real sense of what was going on.

Well, the problem is that Bush has been saying how awesome and brilliant our economy has been and how we should be thankful for that. When the economy is doing well so should salaries.

This revelation proves that people aren't stupid when they say, as they have for a long time, that even though the powers that be say the economy is doing great they aren't seeing it. Nobody ever said this was a depression, or even a recession. Just all income gains are going to the people on top. This proves it.

I'd love to see the median, I imagine it tells an even bleaker tale.

By the way, Trog69, Tennesseean and Florida Democrat, I would like to point out that your zero ratings are in violation of site policy and represent an inappropriate use of the rating system. From the FAQ:

In practice, it can be difficult to separate out how we judge the 'quality' of a comment from whether we agree with its content. But readers should never down-rate comments simply because they disagree with the views expressed.

Readers trying to participate in discussions in good faith should never be given ratings of 1s or 0s. Those ratings are reserved for clearly inappropriate behavior or content -- obscene or offensive language, ethnic slurs, spam, disruptive behavior, extreme ad hominem attacks. This isn't an exhaustive list. But the key point is that you do not give a 1 or 0 to someone's comment just because you think their comment is stupid or because you strongly disagree.

You may completely disagree with what I say, you may find it banal and poorly argued, but it plainly does not meet the criteria mentioned above for a zero rating. I suggest you review these criteria carefully in the future or I will be forced to report your misuse of the system to punish and discourage alternate points of view at TPMCafe.

"Conspiracy" is a thoroughly dishonest way to load the question of whether there's been a market failure. In fact, it rests on the cozy assurance that they never occur, and thus everyone gets his or her deserts. Since that means there's nothing to discuss, I won't discuss the matter failure. 

john 

http://www.haberarts.com/

It seems to me that the underlying question here is whether people should be paid in proportion to what they contribute to the economy or if they should be paid in proportion to their needs.

It is? Maybe to you. I thought we were discussing changes in income statistics, a complex topic, but no, you have to drag it down to a bogus straw man question, that sounds like a pet topic of yours. You sound like you're young and perhaps an engineer of some sort, the sort of person all too ready to treat social phenomena as if they were tidy math problems with neat solutions.

And let me guess, your proposed solution (the almighty, impartial market at work) favors you. What a surprise! I know, you're a contributor and you have earned every dollar you have, while those nameless others obviously haven't, or they'd have more dollars. It's so self-evident. I think you need to get out more.

And your literalist interpretation of my point is even more simplistic. I wasn't suggesting we try to monetize each individual contribution to a complex economic undertaking, just pointing out that those who contribute to the economy are workers as well as owners.

Even these numbers are misleading. They don't take into account the unrealized gains from investments.
*******************************************

Not misleading - it's wealth vs income. The study in the NYT isn't talking about wealth.

Wow! I really hit a nerve.

I don’t think anyone seriously thinks that anyone would be interested in income statistics if not for the concern about income disparities. If one is concerned about income disparity, then one has to address the underlying questions I posed before deciding if there is a problem and proposing a fix.

Re: reality could as easily be that lower-income families took no hit at all, and upper-middle-income families like mine took a considerably more substantial hit.

The really low income peoople probably took no hit at all, since the minimum wage can't go any lower and neither have welfare benefits declined (in absolute dollar terms) and the EITC is still what it's been since Bush took office. The real damage is probably located a bit higher up, in the working class and the lower end of the middle class.

Word aMike! And as you point out, even with your healthy income above 4/5s of the population you are loosing ground to "...persons whose income is above mine especially, the top 5% whose annual family income floors at $157,000 and change."

The math gets even spookier and murkier in that 5%, and in the 1% (the superrich) who benefit wantonly from options and opportunities provided by, and access to the government and are hugely advantaged by the government, while the other 99% or Americans' and particularly those in the bott 4/5's of the population are increasingly and more radically disadvanted by, and denied access to the same government.

All is certainly well in the land of Oz.

"Deliver us from evil!"

What's your evidence that this has happened?

The roaring housing market? The acres of flatscreen TVs at Best Buy? The strong market in Bordeaux futures? The boom in Caribbean resort travel?

Seems to me that I experience quite a lot of luxuries that were truly only known to the rich as late as the 60s and 70s. And I don't think of myself as rich (except in relation, of course, to 99% of humans across history).

No, actually those numbers are misleading because they cherry-pick 2000 as the base year for the comparison. The top quintile is up about 10% in real after-tax income from 2002-2004, for example.

********************************************

Go read the original article. Johnston is the fellow cherrypicking 2000 as the base year. Everyone but the lowest quintile looks good with 2002 as the base.

Here's the link but I haven't had time to figure out exactly what went into the NYT piece.  I hope to post more on inequality data soon based on many of the comments.

http://www.irs.gov/taxstats/indtaxstats/article/0,,id=134951,00.html

A lot of folks found the data in the NYT piece to be unsatisfactory--avg instead of median, and not a full picture of the changes in the income distribution. 

I agree--here are a few more factoids that go a bit further. 

Here's a short analysis by my colleague Larry Mishel showing a transfer of almost 4% of all national income (including capital gains) from the bottom 90 to the top 1 percent.

http://www.epi.org/content.cfm/webfeatures_snapshots_20070801

Census data on household income are less useful for this type of analysis because they leave out some important income sources (capital gains, tax credits).  But they still show increased inequality, as the 2005 share of income going to the top fifth (50.4%) was the highest on record while the middle fifth was the lowest (14.6%). 

http://www.census.gov/hhes/www/income/histinc/h02ar.html

Re medians and averages, Census data show that among working age households (headed by someone less than 65) real median income is down 2000-05, by 5%, or $3,000 (in '06 dollars).  The average is down less, by 3%, about $2,000.  

Poverty is also up 2000-05, from 11.3% to 12.6%.

In other words, while the NYT data are incomplete, they're entirely consistent with other data sources on income/wealth.

BTW, Census releases 2006 income and poverty data next Tues, 8/28.

Are you worse off being 6'2" if the tallest person in the world is 8 feet tall or 9 feet tall?

This is perhaps the most inept analogy I've seen in many a year, but seeing as I'm 6'7", I guess I'll try to answer it.  In fact... I'm going to start with the person and work my way out some, so bear with me.  Here's the first element.

I'm 6'7"... that's the me, not the income, k?  I have needs, based on that...like perhaps a 27" pitch, minimum, in airline seats... following me so far?  K.  So the world is far more populated by people a lot smaller than I am.  Here's where things are going to get tricky.  If I'm too divorced from them in terms of my height--if their average height is a foot smaller than mine, they're going to look at me as a freak, and not give two hoots in hades whether I fit in a plane seat or not.  If they're closer to me, say 6'4" on average, they might care a little, and make themselves just a wee bit less comfortable so I can have circulation in my legs once the flight is over, or they might make common cause with me so that the next generation of jumbos doesn't have even less legroom.

If one considers those who have the power to increase leg room one might argue the same principle applies.  They are more likely to act equitably if they have a greater empathy with those my size.  Otherwise, "how could you possibly be cramped...I've got plenty of room".

Moving this into plain (sic) speech...widening income disparity erodes the sense of the common and community.  These are real, measurable things.  Read Bowling Alone; read anything by Ray Oldenburg or any sociologist who understands why community and the common good matter to all members of the society. The point has been made ever since Aristotle wrote his books on Politics...

Now in all states there are three elements: one class is very rich, another very poor, and a third in a mean. It is admitted that moderation and the mean are best, and therefore it will clearly be best to possess the gifts of fortune in moderation; for in that condition of life men are most ready to follow rational principle. But he who greatly excels in beauty, strength, birth, or wealth, or on the other hand who is very poor, or very weak, or very much disgraced, finds it difficult to follow rational principle. Of these two the one sort grow into violent and great criminals, the others into rogues and petty rascals. And two sorts of offenses correspond to them, the one committed from violence, the other from roguery. Again, the middle class is least likely to shrink from rule, or to be over-ambitious for it; both of which are injuries to the state.

. . . and I daresay he'll be remembered long after Milton Friedman is forgotten.  He's been proved prescient by at least a half dozen civil collapses in Western culture alone.  You want names and dates, the whens and wheres, I can give them to you, or read Arnold Toynbee.  If he's too left or too Brit, read Galbraith. 

Or maybe just read me with a little more care.  I never said I was less well off because of growing income disparity.  I'm comfortable' that's the word I used, comfortable.  That means have all I reasonably need, given my wants and interests. I said that the income disparity in this country was greater and more skewed than using a figure of $100,000.00 per year would indicate.  I also said the gulf between me and the Hathaway crowd was growing, which does not imply that I'm worse off thereby, though it may imply that the community itself is worse off. 

Project a world made safe by gated communities and private security forces, and wonder how enjoyable that world really is, or how safe?  Ultimately, an I got mine, Jack, now you get yours, is ruinous, as a certain French lady found out when she advised cake for a steady diet.

aMike

You make a good case, in your pretentious way, why an oligarchy where there are a few rich and many very poor is bad.

But do you contend that that's the case in America? I live in Chicago and see people all around me at every income level finding a place for themselves, from the snootiest, most gated communities to suburbs suddenly turning Indian or Chinese or Mexican to declining neighborhoods filling with yuppie families bringing them back to life. The fact that there are billionaires in Kenilworth does not in the least prevent me from enjoying prosperity on the north side or Polish contractors from making enough to buy a house in Niles or Mexican restaurateurs from having a house in Pilsen and another in Guanajuato. (It probably helps, actually, by increasing overall fluidity in the market or something.)

I still haven't seen an argument that convinces me it's anything more than envy that motivates this inequality argument. Probably, places that successfully have both a solid middle class and a few super-rich do better, overall, than places that lack the latter.

and, for those with public pensions, their future benefits aren't part of the salary either.

i.e. if I receive $30,000 for 30 years after I retire from a "pension fund," that means that a non-pensioned worker would have to earn a lot more in order to save that much.

I didn't read through all these posts for this point, but-- if fewer and fewer are receiving retirement benefits, then actually salaries have been cut A LOT.

As far as I know, employer retirement contributions used to be in the double dights and now they are in the single digits. Add in employee paid health care premiums and wages have fallen even more.

To boldly go...

And as lousy as that may be, it beats having a commissar decide what's worth more. (Funny, under that system the job of commissar pays extremely well.)

It is good to read that you recognize that there are inequities.  Congratulations on making it.  This is a great country.  But do you really think that our only economic choices are the extremes of both capitalism and socialism?  Why shouldn't we, as a society, be able to set limits on both?  For example, why shouldn't we pool our resources to provide basic needs for all and leave the free market for most everything else?

Actually, mcs, I would and I do.  And I'm not just talking about donating to non-profits of all kinds.  I'm not quite up to tithing there, but I'm getting close.  I do it every time I vote for a bond issue for a civic amenity I don't use myself, or every time I vote yes on a millage issues for the library, public schools, city parks, and the like.  I also do when I vote for a candidate who will raise my taxes to support things in which I believe.  Lots of folks do this.  Since the question was first asked, in every poll taken, voters have said they would vote for cleaner air even if it meant higher taxes for themselves.

aMike

Market failure, for sure.

It's an issue exactly what the economy is. If it is getting enough to eat and shelter from the storm, what does the hedge fund manager contribute? When one CEO makes a million or so and another several hundred million, what is the hugely more important contribution of that second fellow?

Like mgmax, I live in Chicago, and if he can't figure out that there is income inequality here, he isn't looking very hard. The Republican attitute is always: Why don't you live in Kenilworth? Why doesn't your family have an inherited house in Lake Forest? You mean that you don't have a building named after granddad at Harvard?

More to the point, what you are seeing in these statistics, which point to income stagnation, is fundamentalist economics at work. Recently, I read an article in Espresso, in which Gary Becker of the University of Chicago gave an interview (note, to the Italian press) about the wonders of inequality. Inequality isn't a bad thing among fundamentalist economists.

So the question is, Do you want to live in a country dominated by the fantasies of the upper-middle class (mgmax), fundamentalist economics (the market is god), and fundamentalist religion (in which the free-market economy is now taken as an article of faith)? Somehow, I doubt that the Constitution was written to support such claptrap.

JJ.

I confess that I do not understand the point of this comment at all.

Max:

I think you are overly-focused on average income and what is going on in the dot com sector of the economy. That's analogous to focusing on the ups and downs of the financial services industry as the focal point of what's going on in most of this country. It's an inherently incomplete picture.

There's a lot more going on in the economy; take a look at the rustbelt, decreases in manufacturing jobs, spiraling healthcare and higher education costs, the demise of the define benefit pension plan, the price of gasoline, etc.

I'm not playing chicken little and I'm not arguing that the sky is falling, but this economy is not so great for the "average" American family.

Bruce

P.S. Sorry about the troll ratings you're getting. Some people would march in lock step and turn this Cafe into the theme song for the Patty Duke Show:

"They walk alike they talk alike sometimes they even (I forgot the words) alike . . .

Get the picture?

"It's no coincidence that academics, people attracted to life employment in a massive company-town bureaucracy, tend to be socialists, while us freelancer/consultant types, despite living in constant anxiety about our next paycheck, tend to be rabid free marketers"

Data?

"Like mgmax, I live in Chicago, and if he can't figure out that there is income inequality here, he isn't looking very hard"

You didn't read my comment very carefully. That's pretty much the opposite of what I said (which was basically, yes there's inequality, yet there are lots of forms of prosperity available to lots of people, it's not a few mansions above and vast slums below-- that's Detroit!)

"Do you want to live in a country dominated by the fantasies of the upper-middle class (mgmax), fundamentalist economics (the market is god), and fundamentalist religion (in which the free-market economy is now taken as an article of faith)? Somehow, I doubt that the Constitution was written to support such claptrap."

Well, let's see, the Constitution guarantees liberty and the pursuit of happiness, which covers the first two, and freedom of religion which covers the third. Which part of the Constitution do you see as suggesting otherwise?

Match me, Sidney.

No, I never even askeda out!

There is a fundamental libertarian argument being made by some in this discussion. This is that those who have "made it" somehow deserve it. Furthermore there is no downside to this since the pie is (or will be at some unspecified time in the future) big enough for all. It's a nice dream, but doesn't reflect the current state of affairs.

What we have in actuality is nearly a plutocracy. Those with the most wealth have an undue influence on policy. This can be seen in the tax code, it can be seen in the current clamor to have the FED bail out the hedge funds and it can be seen in the way corporate earnings have been distributed in the past decade.

Plutocracy is bad for several reasons. The most important is because it is anti-democratic. When those who have too much wealth get to make policy the will of the people is thwarted. This is what we have now, popular programs like the expansion of health care and support for public education are not being implemented even though a majority of the public supports these steps.

Second, plutocracy is bad for the economy. The wealthy are not interested in entrepreneurship they are interested in preserving their wealth and extracting as much income from their holdings as they can. This leads to reduced capital investment and R&D. It also leads to a less productive work force which makes the US less competitive in the world. Sullen, abused workers are not good employees. One only has to visit a Walmart to see the effect.

Most people don't believe the super wealthy really have as much power as they do. This is because they try to stay out of the limelight and let their lackeys provide the intellectual smoke screen. I'll cite two examples.

The Cato Institute and the economics department of George Mason University are both bastions of libertarianism. They only exist because of the financial support of a single super wealthy individual - Charles Koch.

Here's a short article on how he has supported his libertarian agenda.

Charles Koch Charitable Foundation

If you don't think that a gift (with strings attached) of $23 million to GMU has an effect then you don't understand the power of money.

Estate Tax Report (PDF)

This report shows how just 18 families have been behind the effort to repeal the estate tax over the past two decades. Unsurprisingly Charles Koch is part of this effort as well. He stands to save over $4 billion in taxes if they succeed in their effort.

Money talks in this country. This is why we need a return to a more equitable society. The economic dislocations are not as important as the threat to democracy.

--- Policies not Politics
Daily Landscape

"The study in the NYT isn't talking about wealth"

El Campesino:

Thanks for all of the legwork you've provided to help make this a very productive thread, which follows a most excellent post I think.

While it is true that we have been focusing on income, and while it is a bit unfair in a classical debating sense to shift the focus to include wealth as well as income in the discussion midstream, I think it is also fair to say that if you don't include the significance of wealth, as distinguished from income, in a discussion of how folks are doing relative to each other in this economy, then we are not getting a complete picture.

Bruce

Must be true. I read it on the web.

Go find a chart listing yearly average income, from say 1990 on, and a 5 year running average income. Post this with GNP, and for good measure a DOW chart. Your implication that that 2001 skews the data MUST mean that incomes in 2001 must have had an extraodinary hit.

If you back up your assertions with actual data like this, and I might think your worth a listen.

dc

Few entertainers are even close to multi-million income, and theirs is always pegged directly to sales, unless you mean sports figures and TV personalities, which is a more indirect relationship. You will rarely see a large salary for an entertainer that presides over declining sales, but it's been fairly common in boardrooms.

I pointed out that these outliers can have large effects on my life, as in when they crash a business and reduce the number of people buying subscriptions to my orchestra's shows, or when they take on too much debt and help increase the interest rate on my children's college loans.

And when these outliers crash a business they too often get bailed out, because not to do so would hurt others. By comparison, if I became bankrupt, individually, I would be ignored.

And because these outliers can essentially buy influence in Congress, their votes count more than mine.

And because these outliers buy up land, I have less chance of owning some at a price I can meet.

BTW, what's not personal standing (also could be called status) about more toys and vacations? It's more meaningful to compete for status than toys, anyway This since you can't keep the toys but status buys you a persistent memory in others, a kind of immortality, and it increases your range of choice for mates, the only real immortality we have being in our children.

Since status is relatively independent of absolute measures of wealth we can keep competing without the immense range of income seen now. Not that I expect to ever see Eisenhower tax rates.

You miss my point, so I must have explained poorly. I don't get upset that a business fails--I meant I understand the political pressure to bail it out (e.g. Chrysler). I don't wish for a cap on wealth, nor do I wish to limit a business to an arbitrary value, and didn't sday such. I do wish there was a steeper scale in our tax rates. This would reduce the total range of wealth but preserve the hierarchy of winners and losers.

I buy stuff for both professional reasons and personal pleasure. That's what it feels like. But why is professional achievement important? And why do I get pleasure from a toy? Context is everything--there are no species with a population of one.

Know what I think?

I could be mistaken but I think you are really very jealous of those who are much more economically successful than you and you simply want to punish them. Having that motivation, subconscious or not, you are now casting about searching for a reason why that punishment would be good for society. I’m not a psychologist so I could be wrong, but the symptoms are there.

Those who "made it" may or may not "deserve it"; but they should NOT be disproportinately advantaged by the federal government because of the income strata, and nor should those who have not "made it" be far more disadvantaged BY THE FEDERAL GOVERNMENT because of thier income strata.

Also, if the "markets are god" which may or may not have validity, - then crony capitalist markets (which is the reality of the current panjandrum in the markets) are demons.

There are no free markets. Individuals can vote, make calls, be active, and write letters to their socalled representatives, - but those representatives are beholden to, and actually have periodic close encounters of the third kind with industry oligarchs, lobby groups, and individuals whose wealth provide the kind of access that normal citizens will never know.

Markets are largely influenced by the movements of institution investors whose immense wealth and subsequent power far outweighs, and effectively disadvantages the mass of the population who sadly lack that wealth, that access to leadership in the government.

This is the core issue involved in salvaginig what is left of our democracy. We either re-constitute as a society that cares for it's children (all of them), and elderly (all of them), and provides for certain assistance to those who are institutionally disadvantaged by prejudice or poverty, (all of them) or we don't, and then - what are we really? What sort of nation will we be if we turn our backs on our fellow Americans lacking in wealth and means?

"Deliver us from evil!"

Nothing like psychoanalysis from afar, another innovation of the internets, and one which lands with a resounding thud on what has been a fairly interesting exchange.

I think there is hope for Tom. I am afraid you are terminal amike, as such I will waive my fee as an act of mercy.

Oh, I leave my clients to my partners . . .

I'm quite sympathetic to many libertarian goals, including this one. The particular devil in these details is defining public good, and measuring it. I have mentioned nothing about regulatory bodies, only scaled taxation, which is set by Congress.

Business requires accounting for income and expenses both. An unresolved argument is the proportionality factor for setting the low and high end of scaled taxes. I feel (don't know) that a good look at this would find costs associated with the wealthy that are not found with the poor, at least not as a direct cost. An example would be military force, which is often used to protect state interests. These are typically commerce, such as trading rights or open harbors, or ownership issues like nationalization. It seems natural to set those expenses as directly helping the business owners, and only indirectly helping the rest of us. Or more cautiously we could say there is a sliding scale of cost responsibility, and you have scaled taxes.

It 's hard to find mutually agreed definitions, so arguments will always continue about who should pay and how much. I'm OK with that, just not OK with being told I'm only jealous of others better off. I'm ambitious if that's OK with you, and my motivations are not your concern, nor are they germane to my arguments.

A good source of (what I consider) reasoned arguments against large disparities is Paul Krugman. Several posters here have raised the issue. I've mentioned a couple of mechanisms that should worry us. You merely called me grumpy. Show me the contrary argument, where very low taxes correlate with a healthy society. We'll use indicators like lethal crime, suicide, and divorce. A study that actually looked at religiosity and social health, in the Journal Of Religion and Society, could be used for this argument, since it looked at western democracies, also including Japan. It studied the correlation between observance (along with other measures), and found that the US fairs poorly against European societies. Since another correlation, along with higher measured religiosity, is lower taxation here, I think it's fair to say it hasn't helped much.

The full article is Cross-National Correlations of Quantifiable Societal Health with Popular Religiosity and Secularism in the Prosperous Democracies, A First Look---Gregory S. Paul

We are making progress. At least you have stopped talking about using government to limit the dynamic range of income.

As to your motivations, we have come full circle. Your opening gambit was to suggest that people only strived for economic success to gain status over others and you yourself were inhibited from competing by the existence of very high income people in society that you could not hope to catch. I assumed a degree of envy in that statement, perhaps that is not what you meant to say?

Most of the opponents of income disparities imply that there is a lack of hope and opportunity for the less well off in those circumstances. I am not convinced of that cause and affect. Lack of hope and opportunity causes societal ills, not necessarily income disparities.

You're turning in circles, perhaps. This is kind of circular:

"Most of the opponents of income disparities imply that there is a lack of hope and opportunity for the less well off in those circumstances. I am not convinced of that cause and affect. Lack of hope and opportunity causes societal ills, not necessarily income disparities." Lack of hope causes social ills, and what causes lack of hope? Being a wage worker when CEO's make that income before lunch, maybe?

I said the huge wealth range reduced my motivation, but didn't say it was because I was envious. I said there was no chance of my achieving a Gates fortune.

Nor did I say I was no longer pushing for income range reduction. I said there should be scaled tax rates, which is not a cap, but does reduce the range of personal income.

I still maintain personal achievement is at root increasing your status relative to others, and mainly those in one's social circle. We don't feel successful by comparing ourselves to workers in a maquilladoro south of El Paso.

Did you check out Paul's survey? Read it and get back to me on whether low-tax countries are a better thing.