The L-Curve and Income Inequality

“Them what has, gets.”

The more wealth and power you have, the more you can obtain…and the easier it is to stop others from attaining what you have. In other words, the higher you find yourself on the ladder of success, the easier it is to pull the ladder up after you. Inequality breeds even more inequality.

So how much inequality do we have in this country? Most measures of inequality divide people into “quintiles”, 20% each. That means when we are measuring how much money people make we are lumping those making $20 billion a year in with those making $60,000. And that makes it ever so much easier to lie with statistics–to say things that are literally true but are totally misleading.

David Chandler’s “L-Curve” makes it a bit easier to see what true reality is like. See the graph or the video for yourself, but I will at least give you the word picture:

The US population is represented along the length of the football field, arranged in order of income.

Median US family income (the family at the 50 yard line) is ~$40,000 (a stack of $100 bills 1.6 inches high.)

–The family on the 95 yard line earns about $100,000 per year, a stack of $100 bills about 4 inches high.

–At the 99 yard line the income is about $300,000, a stack of $100 bills about a foot high.

–The curve reaches $1 million (a 40 inch high stack of $100 bills) one foot from the goal line.

–From there it keeps going up…it goes up 50 km (~30 miles) on this scale!

And, as Chandler notes, wealth is even more unequal than income:

The statistics on billionaires are diluted by lumping them in with mere millionaires.

And our friend Paul Krugman spills the ugly truth that those at the bottom are no longer going , through pluck and luck, to find their way to the top:

The myth of income mobility has always exceeded the reality: As a general rule, once they’ve reached their 30s, people don’t move up and down the income ladder very much. … during the first thirty years or so after World War II, the American dream of upward mobility was a real experience for many people.

…[T]his number has dropped to only 10 percent. That is, over the past generation upward mobility has fallen drastically. Very few children of the lower class are making their way to even moderate affluence. This goes along with other studies indicating that rags-to-riches stories have become vanishingly rare, and that the correlation between fathers’ and sons’ incomes has risen in recent decades. In modern America, it seems, you’re quite likely to stay in the social and economic class into which you were born.

Goodbye, Horatio Alger. And goodbye, American Dream

There are now two Americas, the world of the top one tenth of one percent…and the rest of us. If you watch the news you can see it. You hear the newscasters tell us that we have the most wonderful economy. And they (making three million dollars a year or more) are absolutely right. This is the best of all possible worlds…if you are in the top tenth of one percent. In their world there are just two types of people, the Predators and the Prey. And guess which one YOU are…

And our political parties show the split. At the national level there is just one party, the Plutocratic Party, which consists of just about all the Republicans and Democrats who got their position by the contributions of the top one tenth of one percent.

The parties have been placed into power by the votes of the gullible and the toadies, sycophants, and suckups who believe they can do better than the rest of us by eagerly doing the bidding of the Elite.

But the coalition of the Predators and victims is fraying at the seams. Bush lost (big time) because one group of toadies, the Christian Right, stayed home after they finally realized they weren’t getting much.

And the Democratic Wing of the Democratic Party is also slowly, ever so slowly, beginning to realize that Neo-Liberal is not the same as Liberal. But we may rebel more slowly because we can be even more gullible and easily led…

We shall see…

3 Responses to The L-Curve and Income Inequality

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