We are increasingly hearing the rallying cry of "income inequality" which suggests that the middle class is being trampled while the rich grow at our expense.
Truly, the rich are getting richer, yet there are two sides to this:
1) The not-rich are not worse off
2) The rich grow richer because of government (the FED, regulations, bailouts, etc).
This article handles #1 quite well:
http://www.thefreemanonline.org/columns/tgif/not-insulting-our-mothers/
Basic summary:
- The upper X percent are not always the same people. There is income mobility
- Income for the middle class has not decreased (doesn't mention lower class)
- Things you can buy today are hundreds of times more advanced than you could buy 50 years ago. Looking at mere statistics ignores the fact that 50 years ago you couldn't get a 3GHz, 500 GB computer for 1/6 of your monthly wage. Or for any price, for that matter.
Conclusion: the masses are not being trampled. Yet we also need to look at how the government makes some rich unfairly so.
Some of the statistics presented to make this case are (deliberately?) misleading. For instance income of the top 20% of households increases 234% over 10 years and the income of the bottom 20% of households increases 5% over the same period of time (these statistics are entirely made up). Households don't produce and they don't earn income. People produce and people earn income. We have to ask "How many people are we talking about?" Well, it turns out that in 2007, 64 million people were in households whose incomes were in the top 20%, while there were only 39 million people living in households whose incomes were in the bottom 20% (These are real stats now). Even if every person in the country received the same income, there would still be a significant "disparity" between households containing 64 million people and households containing 39 million people. So this aggregation of "households" (really- what purpose does this aggregation serve? Reminds me of how "Women earn $.75 for every $1 men earn" because of aggregation) is highly misleading because it overstates income disparity and understates income mobility. 75% of people in the bottom 20% of income earners in 1975, had moved to the top 40% of income earners, at some point, by 1991.
Stats from Tom Sowell's Basic Economics.
If I had a cake and ate it, it can be concluded that I do not have it anymore. HHH