Republicans - All Wrong, all the Time, Pt 18: Tax Cuts/ Increases and the Deficit

Repugnicants aren't just liars - they are buffoons.

So, by the way, is anyone who would vote for them.

Visit msnbc.com for breaking news, world news, and news about the economy

So, How Bad Is It?

Krugman provides the answers, with graphs.

It's bad.  Really, really bad.

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Haiku Wednesday - Horizons

Horizons

Field of view margins:

Barriers, invitations?

You must make the choice.

Paul Krugman Hits Me Upside The Head With A 2 By 4

 Through the medium of the printed word, Paul Krugman reaches across space and time to smack some sense into me.

Here and again here I talk about income mobility, and how it is misleading relative to personal and generational wealth.  It's actually far worse than I thought.

The data from The Tax Foundation, cited in the second link above, is based on the income mobility of tax payers.   Let that sink in for a minute, because the very same Tax Foundation - pushing quite a different agenda this time - tells us that in 2006, an estimated 41% of the population payed no income tax, including 15 million households or individuals who didn't even need to file a return.  

So - they are basing their conclusions about income mobility on a data set that specifically excludes a large sub-set of the population.  And who are these people?  Let's ask the Tax Foundation.

Why do many single filers face zero tax liability? One reason is that single filers tend to be younger and earn lower incomes than married filers—especially single parents who file as head-of-household. As a result, married taxpayers pay roughly 75 percent of all federal income taxes, despite filing only 40 percent of returns.

Oh, I see - low income head-of-household folks.   It takes no great stretch of the imagination to realize that these are the people most deeply  mired in poverty, and the least likely to ever find their way out of it.

So - basing a study of income mobility on tax payer data introduces an enormous bias.  This methodology is inherently flawed, and leads to a wildly erroneous conclusion about economic disparity.

I will not consider for even a microsecond the possibility that The Tax Foundation did this in honest ignorance. They are a group with an agenda, and to support that agenda they present this misleading study.  This also illustrates how propagandists can mislead without actually telling lies.  They just cherry-pick or select an inherently biased data set, and draw conclusions as if they had considered the entire population.

Wow.  This is disgusting!

You might be wondering what any of this has to do with Krugman.  I wouldn't have thought about any of this, except I'm reading his 1999  book, The Accidental Theorist, a collection of essays originally published in various locations.  In a chapter called An Uneven Exchange, in a section called Right-Wing Wrongs, Krugman tells about something from right-wing asshat lair Dick Armey's 1995 book, The Freedom Revolution.

Armey used a data set over a different time period, but exactly the same methodology to promote the canard that Reagan's economic policies were successful, and the middle class is alive and well.  We'll let Krugman take over (emphasis his.)

Again, he doesn't cite the source, but these are familiar numbers. They come from a botched 1992 Bush administration study, a study that was immediately ridiculed and that its authors would just as soon forget,


This is why: The study tracked the number of people who had paid income taxes in each of the years from 1979 to 1988.  Since only about half the working population actually paid taxes over the entire period, this meant that the study was already biased toward tracking the relatively successful.  And then these earners were then compared to the population at large.

There are two sources of error here: the part of the population paying taxes in a given year, and the even lower part paying taxes over every year of the referenced time period.  These are not mistakes.  With Armey and The Tax Foundation they are deliberate misrepresentations, told to make you believe that the American economy is vibrant and dynamic, the middle class is healthy, and rags-to-riches stories are common in America.  The Tax Foundation study is inexcusable.  Their methodology was proven to be flawed, misleading, and agenda-driven years before they did their study.  They had to know this.

The truth is, the rich are grabbing it all, and you and I are losing ground, every second of every day.

Meanwhile, the regressive liars keep on lying.
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Deep Stupid #18 - Feed Grandma to the Rich

I don't do DEEP STUPID posts very often - not because there is a lack of stupidity out there, but because doing it right is a hell of a lot of work, and I'm rather lazy.

At HuffPo, Neel Kashkari gets the DEEP STUPID treatment, and all I have to do is supply the link!  (Back up, you just passed it.)

Do click through and read what this sniveling asshat has to say. 

There's even a graph!

H/T to the lovely wife.

Not Your Father's Republican Party

Though it might be your great grandfather's.

I've been seriously disturbed by the degeneration of the former Republican, now Repugnicant party into an intellectually and ethically bankrupt cadre of bitter, lying partisan asshats.  There is no point in even trying to be polite when talking about them.  They have one goal: the restoration of an economically and politically elitist oligarchy, as was the case in the first part of the 20th century.  To the detriment of us all, they have largely succeeded.

I commented on this sad turn of events here, here, here, and here.  (Be among the very first to ever set eyes on my early blogs. And if you are going to comment, please do it at this post.) 

Since then, things have only gotten worse.  It's impossible for anyone with the slightest shred of objectivity to avoid the realization that the Repugnicants have nothing to offer, except negativity, intellectual nihilism and a big lie.

Please click through and read these last two links.  They present vitally important insights.
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Not Your Father's Democracy

Over at Plain Politics, (which see, for context) Johnathon opined:

More generally, it's just real hard sometimes for those of us who pay a lot of attention to politics to get around the idea of how little attention most others pay, including the broad category of those who vote most of the time . . .

He is referring, of course, to the infamous "LOW INFORMATION VOTER," aka, the overwhelming majority of the American electorate.


In comments, I offered this (edited for political relevance) opinion:

1) Democracy assumes an intelligent and informed electorate. Without it, we get what you are describing. Which is why democracy is failing in this country. Maybe that is why, historically, democracies have a finite life time.
 
2) Life is hard. After a day of slinging whatever from 9 to 5, parent teacher confs. and all the other stuff of life, the universe, and everything, who wants to think about something as arcane and intrinsically difficult as politics? Especially when the BIG GAME is on. Ergo, no. 1.

3) With international corporations so much in control of both parties, it's pretty easy to think "There's not a dime's worth of difference." This makes apathy a pretty inviting option. Ergo, no.1.
 
4) There is so much deliberate misinformation: Obama is an Arab Nazi socialist, Bush tax cuts didn't increase the deficits because they lead to a (god help us) "vibrant" economy; that finding real information and sorting wheat from chaff takes considerable effort. Ergo, no.1.

Aren't we kinda screwed?
JzB

A Real Number of Posts on the UNIT

In my quest to discover why 1 is not a prime, I have found out that since the time of Euclid, 1 has not even been a number!?!

I am giving up. Not so much conceding defeat as loosing by default while I slouch away from this mad-hatter numerology, muttering and shaking my head. You see, the prime reason "One" can't be a prime number is that it isn't even a number to begin with.

This is more than my little pea brain (and I only have the 1, you see, so my number of brains is . . . well, not 0, since 1 is not zero, but it has to be zero because 1 is not a number - can you see where this is taking me?) can handle.

This is probably why I became a lowly chemist, whose approach to numbers (and/or units) is strictly utilitarian.

I am going to make me a unit of honking big martini, with a legitimate prime, odd and Fibonacci number of jumbo olives. (Three, if you must know.)

Cheers!
JzB who is one perplexed unit (if that's not redundant)

Quote of The Day

I love it when Brad Delong agrees with me.  I have been thinking something very much along the lines of his first paragraph, but never got to the point of articulating it - and besides, who the hell am I to say such a thing?

One of the embarrassing dirty little secrets of economics is that there is no such thing as economic theory properly so-called. There is simply no set of foundational bedrock principles on which one can base calculations that illuminate situations in the real world. Biologists know that every cell runs off instructions for protein synthesis encoded in its DNA. Chemists start with what the Heisenberg and Pauli principles plus the three-dimensionality of space tell us about stable electron configurations. Physicists start with the four fundamental forces of nature. Economists have none of that. The "economic principles" underpinning their theories are a fraud--not bedrock truths but mere knobs twiddled and tunes so that th right conclusions come out of the analysis.

What are the "right" conclusions? It depends on what type of economist you are, for three are two types. One type chooses, for non-economic and non-scientific reasons, a political stance and a political set of allies, and twiddles and tunes their assumptions until they come out with conclusions that please their allies and their stance. The other type takes the carcass of history, throws it into the pot, turns up the heat, and boils it down, hoping that the bones and the skeleton that emerge will teach lessons and suggest principles that will be useful to voters, bureaucrats, and politicians as they try to guide our civilization as it slouches toward utopia. (You will not be surprised to learn that I think that only this second kind of economist has any use at all.)

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Six Word Saturday 7/24

Concerts rained out two straight weeks.

Lots of rain in the long range forecast, too.  And the humidity is oppressive.  Yuck!

What the Hell? Friday -- On the Primacy of the Number 1

Or not.

In another part of the universe, I was corrected by a math teacher for calling the number "one" a prime.

After a bit of research, I retorted thusly:

I read the info on 1 not a prime and am deeply underwhelmed. Unless I'm missing something big, the reason that 1 is not a prime is that mathematicians have conspired, in a completely arbitrary and discriminatory fashion, to deprive 1 of primehood, by including in the prime definition "greater than 1." If you take a prime to be a number divisible only by 1 and itself, 1 clearly qualifies. Granted it's the degenerate case (chemists will understand what this means) but that really makes no difference.

Tongue in cheek - sure.  But I'm not above a bit of japing.  Anyway, I was advised to have a look at this link.  Which I did.  Here is my new and improved response, re: the four reasons found there (which see.)

Answer 1: 
My point exactly: by definition, with no serious reasoning.  It's a totally unconvincing word game, and totally lame.

Answer 2:
Re: the fundamental theorem - the word "uniquely" is the kicker here.  But that is still just word play.  Tacking on any number of "x1" factors is clearly redundant, and could be eliminated by a more elaborate and linguistically clumsy definition - which I will not attempt at the moment.  BTW, this also illustrates what I meant by a degenerate case.  All the infinite number of potential "x1"s collapse into a single "x1."

Actually, I'll go further and say that the fact that you can write the product non-uniquely is irrelevant to the fact that you can still write it with a single "x1" in the formula, and that THAT is a unique answer.

So we still do not have a really sound reason.

On the other hand, though, lets take another look at the fundamental theorem, "Every positive integer greater than one can be written uniquely as a product of primes."  Ignoring the problematic "uniquely" for the nonce, clearly, if 1 is excluded from the primes, then this theorem crashes and burns.  What are the factors of any prime, say, 5?  They are 5 and . . . and 1!  How can this simple fact not put a Q.E.D. on the primacy of 1?

Answer 3:
By the logic expressed there, I cannot be both a trombonist and a grandfather, though each is a subset of the set  "real humans"  -  being a grandfather is sooo much more important.  Really?  A thing cannot belong to two sets at once?  Five is both a prime and a Fibonacci number.  This reasoning is embarrassingly fatuous.

Answer 4:
This seems to be just an elaborated restatement of definition 3.

Now it's possible that I'm missing something, but here is my verdict.

Reasons for excluding 1 from the primes boil down to, "It's not because I say it's not."   I think that claim has no merit, and can be summarily rejected.

Reason for including 1 in the primes is that without it, the fundamental theorem turns out to be false.   This is not really a big deal for me, but mathematicians will probably find it disconcerting. 

Ergo, 1 is a prime.

Q.E.D.

Where did I go astray?  Help me out, somebody.

Presumably, A Happy Ending -- Sort Of

It's all over the news, but I saw it at P6 first, so I'll give him the hat tip.

The White House has apolgized, Visack has apologized.   Well, good for them.  Sherrod has been offer a new job at the Ag Dept.

But the basic cancer of lying right wing character assassination as a variant of gotcha-ism remains unaddressed.

Breitbart remains a hero on the right.  David Frum reports on the reactions of the right.   Click through his links to find lots of well-deserved condemnation of the Obama administration for their callous treatment of this innocent woman.  As for Breitbart . . .  pretty much crickets.

When Dan Rather succumbed to the forged Bush war record hoax in 2004, CBS forced him into retirement. Breitbart is the conservative Dan Rather, but there will be no discredit, no resignation for him.
 
Instead, conservatives are consumed with a new snippets-out-of-context uproar, the latest round of JournoList quotations. Here at last is proof of the cynical machinations of the hated liberal media! As to the cynical machinations of conservative media — well, as the saying goes, the fish never notices the water through which it swims.

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Krugman on Sharrod

But whaddya know, the scandal was fake.

(Emphasis added)

What’s shocking here isn’t the behavior of the right, which was par for the course. It’s the seemingly limitless credulity of the inside-the-Beltway crowd. I mean, there’s a history here: ACORN, Climategate, Vince Foster, Whitewater, and much much more. (Someone recently reminded me that the GOP held two weeks of hearing on the Clinton Christmas card list.) When the right-wing noise machine starts promoting another alleged scandal, you shouldn’t suspect that it’s fake — you should presume that it’s fake, until further evidence becomes available.

So now Tom Vilsack, the Agriculture secretary, says that he may “reconsider”. I’d lay even odds that the Sherrod firing stands, even though it was totally unjust, because people in DC are so accustomed to cringing in the face of the right that they just don’t know how to stop.

I can't say that this is gong to ruin Shirley Sharrod's life, or even in the long run* it might be a good thing for her.  But it's clear she's having a couple of very bad days - all through no fault of her own.  She has been badly wronged by Breitbart, by Fox Noise, by Vilsack, and the Obama administration.

Speaking of which - don't they have a Justice Department?  And isn't mendacious defamation of character kinda the definition of libel?  Shouldn't somebody be suing somebody?  (H/T to the Lovely Wife.)

Obama and Vilsack owe Sharrod - BIG TIME.  The awesome forces of the U.S. Justice Dept should be unleashed on Breitbart and Fox Noise.  The Government owes no less to this hard-working, highly-skilled, and dedicated former employee.

I'm not holding my breath.

Did I remember to mention that I love it when Krugman agrees with me?
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* Where, as the late J.M.  Keynes reminded us, we are all DEAD!

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Haiku Wednesday - Aging

AGING

Things don't work the same -
And are slower.  What is in
The future?  Depends . . .

Alas, poor Shirley - We hardly Knew Ye.

But we now have positive confirmation for what we should have known anyway about Andrew Breitbart.

I will spare you the invective that could be expressed here, but encourage you to provide your own.  Breitbart has done something appalling, disgusting and awful.  The victim here - and this is not a word I drag out very often - nor do I feel compelled to talk much about top news items, but this has made my gorge rise - is Shirley Sherrod, a rural development director for the U.S. Agriculture Dept.

Taking words out of context to distort and wrongly indict is a despicable act.  Unfortunately it is common practice among right wingers.  As is mindless repetition of right wing idiocy by the Fox News organization, which happened today, regarding this item - by more than one of their alleged reporters, again by O'Reilly, and yet again by Hannity.  I'm writing this as I watch the Fox clips on the  Rachel Maddow's show rerun.  (P6 already has some of Rachel's video clips posted, here and here.  Wow - fast work!)

It was similar faux reportage by Fox News that that brought down ACORN - again, based on doctored videos originating in Breitbart's organization.

Wake up people.  And ask yourself: Why does anyone tell lies?  The answer is that the truth does not fit their agenda.

If the truth does not fit your agenda, your agenda is unworthy, and might even achieve full-scale evil.

This is how Breitbart operates.  This is how Fox News and all of Murdoch's NewsCorp operates.  It is how Repugnicants operate.  It is what conservatism regressivism has degenerated into.

Equally appalling is the Obama administrations repeated willingness to give in to these lying bastards, regarding Van Jones, ACORN and now Shirley Sharrod - a fine, decent person who went far, far out of her way to help the white farmers at the center of this story - as they have been quick and eager to point out.

I am disgusted by the gutless Obama administration.  My contempt for Breitbart, NewsCorp and right wing regressives cannot be expressed in language I would want to see over my signature.

The NAACP also reacted rashly and incorrectly.  But they had enough integrity and courage to retract, correct and apologize.  (See the 2nd Rachel clip, above.)

Obama?   Vilsack?   Anybody there got either a backbone or some shred of decency?

What a horribly depressing turn of events.  

Thank you, right wing world.

Welcome to the Lost Decade . . .

. . . or more.

This is what the unemployment picture looks like, from CEPR, via HuffPo.

(And check out the other graphs at the CEPR link.  You might want to have a strong drink handy.)   That leveling you see above through '09 and improvement (for a while) this year - such as it was - were due to the stimulus package.  Which is about done.

If I can invertly paraphrase what minority leader and Rethug asshat John Boehner said in a different, but related context, this is elephant hunting with a sling shot.  Fact is, it was just enough to give lying Repugnicants, glibertarians and ideologically-blinded Austrian fellow-travelers an excuse to claim it didn't work.

Well, it did work.

A little.

For a while.

In spite of being largely wasted on totally non-productive tax cuts.

Our journey to the lost decade comes to you courtesy of Prez B. Hoover Obama, Yellow Dog DINOS, obstructionist Repugs, and the richest 1% of Americans, whom all of the above suck on like toads.

Update: The problem with things like the stimulus package is, of course, that debt and debt servicing costs are increased.  Or so the story goes from them who be agin' it.  Krugman gives us some historical perspective.
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Oil and Water Do Mix . . .

. . .  at the parts per million level.

To put this in perspective, New York city has a population of a bit over 8 million.   So, if 8 illegal immigrants from, say Iceland, scattered in New York City, their concentration would be about 1 ppm.

Not a lot, unless each of them is toxic.  Then who knows what might happen?

Maybe they'd all go to the beach.


WKRG.com News

Via HuffPo.

H/T to the Lovely Wife.
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Sunday Music Blogging - 7/18

Wow, is this wonderful. Sit back, close you're eyes and take it in.

And if you think it sounds dated, you might want to know that these cats were both born 101 years ago.

Six Word Saturday 7/17

Jazz Fest Tomorrow - Playing My Song

An original tune I wrote and arranged for big band - very exciting!

Question of the Day

This is prompted by seeing the Word AVER, clued as "state firmly," in yesterday's L.A. Times Crossword by the always brilliant Jerome Gunderson.

Is the thing that you AVER an AVERAGE? And if what you AVER is characterized by malice, would it be a MEAN AVERAGE?

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Haiku My Heart - One Genie

Amanda soars on

Sore dancing feet, and flights of

Imagination

Photo credit and copyright, Amanda Z
(Enhancements via Picnik)

Haiku copyright JzB

For more heart-felt haiku, visit

Haiku my Heart Friday

Productivity - It's A-Wunnaful

In comments here, Tux brings up the issue of efficiency in making stuff, which is a contributor to productivity.  His point is that we are too efficient.  I've never considered that angle in that way, and he may be on to something.  Most particularly because of what productivity has done to wealth distribution.

Well, hey - I have some graphs on that subject.  (Are you surprised?)    Full disclosure: these are not my graphs.  They come from The Economic Mobility Project Report, by Isabel Sawhill and John E. Morton, which I previously linked  here.

The first graph shows how median income and productivity traveled pretty much in lock step in the post WWII years, until something happened.  The thing that happened was the presidency of Ronald Wilson Reagan.

Here are some close-ups.

Up through '74, everything seems to be in order.

To recap:
Truman - OK
Ike - OK
Kennedy/Johnson -  OK
Nixon/Ford - Yup, still OK
Carter - OK.  Geeze - even the moribund Carter administration was OK.
Reagan - Well, a bit of separation starts to develop, but maybe not too bad . . . maybe?
Bush I - The first major divergence, as productivity goes on it's merry. steady way, but median income declines.  Wait a minute -- productivity up, and incomes down?  How in the hell can that happen . . . ?
Clinton - It takes a couple of years, but median incomes start to rise again (yay!), pretty much parallel to productivity increases.  Phew - it's a good thing we got that divergence behind us.

Oh -- wait . . .

Bush II - Well, shit!  It looks like the wheels came off.  Off median income,that is.  But not productivity, which continued to rise apace.  But if productivity goes up, and median income doesn't, then where, oh where is all that increased profit going?

(For reasons that are not likely to become clear any time soon, the authors chose to renormalize  both productivity and median income to a base of 100 with Y2K data in that last chart.  Perhaps they did so because the growing divergence would make fitting both lines on a single graph awkward.  It already looks like a damned alligator's gaping maw!)

But wait - there's more.  I have a graph (ta-dah) that answers that question.

Well - I guess that answers that.  But, hey - it's all good, cuz, who needs a middle class anyway?

Haiku Wednesday - Chocolate

CHOCOLATE

I like it dark and rich

(Not like that weak milky stuff)

Coating blueberries

Is it Time to Turn Communist?

What can we do, and how can we find a way to balance the unbridled power of Multinational Corporations, when the people don't have a voice?

Here is one man with a voice, doin' what he can.




I seldom post music on any day other than Sunday - but this is kinda special, doncha think?

Via Huffington Post

H/T to The Lovely Wife.

Update:  But, wait there's more . . .

"Think, People!"



Jesus - this had me in tears.

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This is What We Are Up Against

Anyone thinking about voting for a Repugnicant this fall - or EVER, for that matter, must first first have a look at this chart.

And then consider the words incoherent babbling of the idiot John Kyl.

You do need to offset the cost of increased spending. And that’s what Republicans object to. But you should never have to offset cost of a deliberate decision to reduce tax rates on Americans.

Even if this were decipherable, it still wouldn't make any sense.

But the invincibly ignorant Mitch McConnell agrees.

[T]here’s no evidence whatsoever that the Bush tax cuts actually diminished revenue. They increased revenue, because of the vibrancy of these tax cuts in the economy. So I think what Senator Kyl was expressing was the view of virtually every Republican on that subject.

The invincible ignorance of  "the vibrancy of these tax cuts in the economy" bears repeating.  Clink the last link and look at Krugman's charts.

And -- Every Repugnicant?  Really?

Oh.

H/T's to Krugman and Delong

I almost forgot to mention -- we are so screwed!

Note To Teabaggers: Bush Owns the Deficit - Stimulus Spending is Irrelevant

From Gregory White and Kamelia Angelova at TPM:

President Obama's administration has been blamed for reckless spending that has put America into its debt hole. But in reality, much of that spending emanates from policies of President Bush, according to the Center on Budget and Policy Priorities.

They argue that Iraq, Afghanistan, and the Bush tax cuts (along with the economic downturn) are what is driving the U.S. deficit, not stimulus spending.

The chart presents the ugly truth.

H/T to Delong

Quote of the Day

Today's honor - and a genuine honor it is - goes to CNBC anchorman Mark Haines for 1) having actual facts in hand and 2) doing further fact checking to blow up the utter bull shit of a popular right wing talking point.

For context, check this at Applesauce.  Go!  It's important.



H/T to the Stephanie Miller show.

And a SHALLOW STUPID citation to lying right-wing bastard and lousy tap dancer Hans Bader of the ExxonMobil funded, global warming denialist Competitive Enterprise Institute.

Architeuthis dux!

This, for the squid lover in you.

KRAKEN

H/T to C/T

Quote of the day

FDR was on the right track, but didn't have it quite perfect when he said the only thing we had to fear was fear itself.  They real bogeyman is deflation.

On this topic, Kruman's blog today is a must read. (Plus - he has graphs!  You know I love graphs.) To save you a couple of click throughs, here is the very Krugmanesque-sounding also must-read article by conservative economist John Makin, from the American Enterprise Institute (!?!) which prompted his post. 

It is also the source of today's quote:

In fact, banks have virtually ceased to function as financial intermediaries since 2008, preferring to use the zero cost of money provided by the Fed to finance purchases of Treasury securities instead of supplying loans to households and small businesses. After a financial crisis, banks become much more risk averse, as is manifest in their willingness to lend only to the government instead of to households and businesses. That development is deflationary because it means that a sharp boost in the monetary base engineered by the Fed does not translate into faster monetary growth at a time when the precautionary demand for money has been boosted by elevated uncertainty.

I can't say for sure that the dysfunction of banking is the cause of the M1 multiplier collapse, but the timing is impressive, and it could hardly be mere coincidence. Maybe its the other way around, or they have some common cause.

While I love having both Krugman and Makin agree with me, I seriously fear things will become far, far worse before they get any better.   B. Hoover Obama is not a progressive, and there is no political will to correct the ongoing depression.  Meanwhile, Repugnicants and lots of other conservative economists, along with the E.U., are preaching austerity, which will be the ruin of us all.

There is no comfort in being right about this stuff.

Income Mobility Revisited

I've shown graphs of this type before, but here is one more, from Wikipedia showing the share of pre-tax income held by the top 1%, and its fractions, over time.  Their degree of capture, though variable, was historically enormous, even through the great depression; dropped through WWII; and was then relatively flat through the mid 80's.  After then, it rose rapidly and is now in the range of the roaring 20's levels.

But income distribution drastically understates wealth distribution.  Capturing a disproportionate amount for decades on end results in an even larger disparity in wealth distribution, as this chart that I grabbed from G&T shows.

It is against this backdrop that Adam Ozimek told me here that I need to reconsider my narrative on wealth and income distribution, since it is not supported by the data.  Adam is being obtuse, in more ways than one.  First off, in that post I had no narrative - only questions.  I do have a narrative now, which I believe is data-driven; and in all honesty, my underlying opinions have, if anything gotten stronger in the reconsideration.

Another thing I've dealt with before is the ugly reality of tax policy.  It is no great mental leap to look at tax reductions on high income since the Reagan regime, along with the elimination of the zero tax bracket in 1987, and conclude that both wealth and income disparity are their direct resultants.

But, before I get to my narrative,  a small digression.  The Steven Horowitz post I originally quoted reaches a completely different conclusion form this NY Times entry, using a different, but not greatly dissimilar data set over a slightly different time span.   The Times' interactive graphics are impressive and illustrative.   So, in a sense, data doesn't matter.  If you are determined in believing something, you will be able to, no matter what the data tells you.  Horowitz believes, and presumably Adam concurs that:

The bottom line is that income mobility is alive and well and seems pretty consistent regardless of who is president or who controls Congress.  The underlying market processes appear to be doing well at enabling a majority of those who start out poor to move up the income ladder within a decade or less.

The part about government is pretty close to correct.  Data over different decades do tell similar stories.

Where I part company with them, and my narrative begins, is in their apparent belief that income mobility represents anything like real wealth and social mobility - at least in a way that is worth crowing about.  (And the underlying blind faith in the magical market fairy wouldn't have been shared by Adam Smith.)   First off, it's hard to imagine a modern society with absolutely no economic mobility.  There is going to be some, regardless.  According to Barbara Tuchman in A DISTANT MIRROR, even medieval France, under static feudalism, had a turnover rate among the landed nobility of about 50% per century.  The question now is, how do we compare to the rest of the industrialized world.  The meaningful way to measure that is across generations, not within anyone's wage history.  And all indications are we are quite static in that regard.  Reaganite America and Thatcherite England are less mobile than other countries in Europe.

What is being touted as "income mobility" is a combination of some measure of real mobility, plus a lot of churning, drift, and (to BT's point in comments to my original post) the natural earnings arc across a typical professional career.  In ECONOMICS EXPLAINED, Heilbroner and Thurow tell us that about 1/7th of the bottom quintile is composed of young people just starting their careers.  My take is that their inclusion in the bottom quintile is a data artifact - ephemeral, and not at all indicative of either their background or potential - which remain strongly correlated, though access to educational opportunities.   Another 30% represent old people on fixed and limited incomes.  My older relatives are in this category.  Again, the income level might or might not be reflective of their actual level of means.  For these folks, decades of income history precede the slide into the bottom income quintile - which is taken by Horowitz as evidence of downward mobility.  In my own case, by retiring, I've moved at least two quitiles down from 2008.  This is nothing remarkable.  It most assuredly is not an example of someone formerly rich becoming suddenly poor.

But let's set all of that aside for the nonce, and take the data Horowitz cites, from Robert Carroll, Sr. Fellow at  The Tax Foundation, at face value.   He presents a table showing where the people in each quintile in 1999 wound up 8 years later.  His reported exit from the bottom quintile exceeds the historically typical 50% (approx) in a decade, but we'll just go with it.  I always think a graph makes numerical information more digestible, so I made a few.

The bottom label indicates which quintile  people came form, and the bars show where they ended up.  The distributions look very much like Poisson shapes to me.  This is reasonable, since "It applies to various phenomena of discrete properties (that is, those that may happen 0, 1, 2, 3, ... times during a given period of time or in a given area) whenever the probability of the phenomenon happening is constant in time or space."

Next, note the assymetries.  A fall from the top quintile is far less frequent than a rise from the bottom.  (More on this later.) Third quintile starters are much more likely to go down than up.  Second quintile starters are almost as likely to fall as to stay put.  Consider the possibility of churning - insignificant movement across an arbitrary quintile boundary over time - something like going from the 17th percentile to the 24th, or vice versa: a change in quintile with no meaningful change in wealth or means.

Drift can occur when a person with relatively static income gets overtaken by a boundary moving up over time, as mean income rises.  It's easy to imagine that happening to those at the bottom of any quintile but the first - but most especially in q's 3 and 4, where many people achieve their maximum salaries in late middle age.   Virtually everyone who, like me, got a marketable college degree in the late 60's would travel the route through the quintiles over their careers.  We are Heilbroner and Thurow's 15%. (To be clear, this is 15% of the bottom quintile, not the entire population.)

To complete the picture, let's take a look at the high income end.

The first and most striking thing to notice is that if you are in the top 10%, you are almost certainly going to stay there.  The corollary is that almost everyone who left the top quintile was below the 90th percentile.  If you are rich, you stay rich.  If, like me, you had a reasonably decent career that allowed you to crack the top quintile after a few decades, you were primed to drop out at retirement.

I suspect that the bottom 5% have similar non-mobility.  So the born poor, die poor life story is still very much intact.

So here, in summary, is my narrative.  Yes, there is real WEALTH mobility in our great nation, and there always has been.  But it is far less meaningful than the Tax Foundation and its fellow travelers would have you believe.   Those of us in the middle class already have lots of opportunities to move through the quartiles of INCOME as we negotiate out careers.  There are both churning and drift at the quintile boundaries.  Real dramatic movement from rich to poor, or from poor to rich might not be exactly rare, but it is certainly far from being common, and is not a realistic goal or expectation for anyone.  Conflating income changes with wealth mobility, and then calling these income changes a great success for allegedly free markets is simply a regurgitation of time-worn right wing ideology, and not a data driven conclusion.   Real wealth mobility takes place across generations, just as it did in medieval France.  Income distribution paints a picture that is colorful, interesting in and of itself, but not at all compelling in terms of moving people either into or out of poverty.  In a context of historically wide wealth distribution, any focus on trivial income changes is misleading, ideology rather than fact driven, and fatuous. 

What do you think?  Is my narrative supported by the data?

The comment area is always open.

Update:  M Bouffant has some more graphs (you know I love graphs - and the non-mobilty vis-a-vis other countries is pretty striking.) along with some short but very pointed commentary delivered in adult language.    You have been warned.  Big H/T to Suze.

Update 2:  M B's graphs come from a report by the Economic Mobility Project.   Their language is circumspect, but clearly verifies, validates, and confirms my narrative. A quote from former president, and well-known flaming liberal G.W. Bush in 2007 is telling: “The fact is that income inequality is real — it’s been rising for more than 25 years.”  I can also now state with considerable confidence that the economic mobility that my generation enjoyed has significantly deteriorated.  The land of opportunity offers less to my children and grandchildren that it did to me.

Update3:  As sad as these results are, allow me to paraphrase Steven Horowitz and say "just think what we might do" if we restored the kind of tax and regulation policies that gave us a strong and vital middle class 50 years ago instead of operating with a blind faith in the magic of free market processes.

Haiku Wednesday - Contemplation

When contemplating,

Do you look backward, or with

Hope - to the future?

Something I contemplate a lot is the attitudes people have toward politics. The differences in mind-set between progressives and regressives (what conservatives have degenerated into) are stark, and to a large extent, unbridgeable.

How you answer the question in my haiku above has a pretty good chance of identifying your political stance.

L. A. Times Crossword puzzle Blogging

Wed July 7 Gareth Bain

Theme: Never give up.  Six symmetrically placed theme entries all begin with synonyms for the key word, TRY

17A. *Prepare to drink, as a can of beer : CRACK OPEN.  Have a CRACK at it.
21A. *Say goodbye, quaintly : BID ADIEU.  Place one's BID, I suppose.  Or issue a command or invitation.  Doesn't seem as tight a fit as the others.   Am I missing something?
26A. *Betrayal : STAB IN THE BACK.  Take a STAB at it.
49A. *Nixed : SHOT DOWN.  Have a SHOT at it.
44A. *Do what others prefer : GO WITH THE FLOW.  Have a GO at it.
59A. *It involves a lot of writing : ESSAY TEST.  ESSAY the possibilities of it.
And
61A. Synonym for the starts of the answers to starred clues : TRY.  If at first you don't succeed, have a beer and call it a night. TRY, TRY again.

With six theme answers and a key word entry, this is a very thematically rich and persistently active puzzle.

Hi gang, it's JazzBumpa, your humble trombonist. I BID us to have a STAB at CRACKING this puzzle.

David Brooks Is Not Having a Good Day

David Brooks just gets stupider as time goes on.

Today the PAPER OF RECORD, which evidently has no actual editor for its Op Ed page, allowed this piece of idiocy to escape from the deep, dark, empty recesses of Brooks' cavernous cranium.

People who have actual gray matter between their ears are not amused.

You can check it out:

Here.

Here, and

Here.

Idle Money

I read somewhere in the early naughts that corporations were sitting on record piles of cash - hoarding rather than investing or hiring.   I can't say that this has or hasn't been a constant over the decade*, but I've suspected for quite a while that this is the case now - either still or again.

Krugman confirms my suspicion, and even suggests a remedy.

He didn't even mention that the Gov't could borrow now at historically low rates - but I guess that does go without saying.

* If anyone knows how to track down this information, I'd be grateful to know about it.

Tax Burdens and Economic Growth – Answering the Objections

Over at Angry Bear, Mike Kimmel has been posting for years about the economic results achieved by (mostly) post WWII Presidents.  Regressives of the kind I refer to in the last sentence of the last paragraph here have raised all sorts of objection to his conclusions, at various levels of rationality and sophistry.

In this post, he addresses them, head on.  (Even those that are pretty clearly head off.)

It's Lonely At the Beach - or Maybe Not

Southern Beale busts The Economist for its misleading cover picture.

You go, girl!

Liberals and Conservatives - A Short Introduction

Over at Angry Bear, I opined thusly:

The moral basis for liberalism is humanity, and improving its general living conditions.  The environment is important for a lot of reasons.  One of the big ones is humanity has to live in it  
 
The moral basis for conservatism is stable structure.  This typically manifests itself as property and/or family, since those are tangible and easy to grasp and define, almost always and everywhere.  But allowing conservatives to co-opt family values is a huge error; it is wrong - factually, morally, and tactically   Domination by an aristocracy is not a good definition of conservatism, but it is a good description of how structure is frequently imposed on society - to the self-serving ends of the aristocracy, by no coincidence.  
 
Conservatives are against change, free thought, and secular humanism, and are suspicious of science because those things will always challenge the current structure.   Cf. Galileo.  
 
Russell Kirk tells us that conservatism is a mind set, not an ideology.   This explains why hard liners in the old Soviet Union were the spiritual equivalents of frex, Jesse Helms or Strom Thermond, with whom their ideological  overlap was essentially zero.  They were all about maintaining structure, and to the small mind, that means the status quo.  
 
Remember, the cornerstones of the conservative mindset are ignorance, prejudice (Kirk is proud of these!) magical thinking, and false choice.  These are necessary conditions, since an overarching commitment to maintaining stability is generally inconsistent with the natural course of humanity - which is progress.  Every political, social or technological advancement ever achieved has been over the staunch objections of conservatives.  
 
Give a conservative an ideology, and he becomes a regressive.  Hence, the tea party movement.  
 
In short, liberals are about people and progress.  Regressives are about things and preserving a static society.  
 
The reason have-nots get sucked into regressivism is that they are deceived by right wing propaganda about values and rights.  Some people have a natural tendency to this mindset anyway, and thus, irrationally, embrace a mode of thinking that is overtly contrary to their own self interest.  
 
People are conservative/regressive out of greed, ignorance, fear, gullibility, or some fundamental misanthropic personality flaw.   The latter group cannot be reached by truth, logic, or any manifestation of reality  

Which is kind of why we are so screwed.

That Damn Krugman

Over at TGGP's stinky blog, in response to one of my comments to one of his posts, he directed me to this piece of drivel from the Econ Journal Watch, by Brett Barkley.  Well, we can see how qualified he is.  I wish him well in his career in the theater, since he's obviously strong on make-believe.

Here is my comment in response.

This is not the first time I’ve seen an EJW article that attacks PK, in an entirely invalid way. I’m not going to wade through 38 Pgs of Brett Barkley bullshit, but I did skim the Krugman section enough to see what he’s doing. Barkley’s unstated underlying premiss – that all deficits are created equal – is either abysmal economic ignorance, in which case the EWJ should have rejected it, if THEY were honest, or mere sophistry – so, clearly, they aren’t. I’m convinced it’s the latter. Though, who knows, BB might be as dumb as this makes him look.

Krugman was against Republican – specifically Bush II – policy because it was unsound, irresponsible, and possibly idiotic. As far as I know, no other regime in the history of the world ever simultaneously cut taxes and went to war.

It’s clear, even from Barkley’s cherry-picked quotes (and note he omits Krugman’s response – whatever it might have been – to Russert’s question) that PK recognizes when and how to have and not have deficits, and why the differences are important. One thing I often see in right wing regressives is a suggestion that policy doesn’t matter. Of course, they turn this on and off as a matter of convenience.

One of the things that inspires PK confidence in me is that his critics are always like this. They misquote, quote out of context, and use all sorts of propaganda techniques to deceive their readers.

The other things I’ve noticed about right wing regressives is a total tone-deafness to irony. Barkley’s Adam Smith quote as a header to his hatchet job is absolutely brilliant.

As I’ve said repeatedly, it’s fine to disagree with PK. In fact, it would be great to see someone actually prove him wrong. But please use real facts in their intended context, and valid logic. Meanwhile, I’m not holding my breath.

Cheers!
JzB

Here is the aforementioned Adam Smith quote, from his Theory of Moral Sentiments

A true party-man hates and despises candour; and, in reality, there is no vice which could so effectually disqualify him for the trade of a party-man as that single virtue. The real, revered, and impartial spectator, therefore, is, upon no occasion, at a greater distance than amidst the violence and rage of contending parties. To them, it may be said, that such a spectator scarce exists any where in the universe.  Even to the great Judge of the universe, they impute all their own prejudices, and often view that Divine Being as animated by all their own vindictive and implacable passions. Of all the corruptors of moral sentiments, therefore, faction and fanaticism have always been by far the greatest.

Update:  There is more to the discussion at PDDB's place.  Follow there if interested.

Sunday Music Blogging - 4th of July

I have no idea who Jaycie is, but this is pretty sweet.

Six Word Saturday 7/03

Still the economy - and still stupid.

H/T to P6.

Haiku My Heart - One Bubble

Abbie's bubble - a
Perfect sphere of captured light. 

Shining in the dark.

Haiku my Heart Friday

H/T to MMT

Lazy Money

 The M1 Money Multiplier, after a slow 23 year decline, fell off a cliff in Oct 2008.

Since then, it has gone nowhere.

Looks like a very, very sick economy.