Comments on: Income Inequality, Spending Inequality, Wealth Inequality

By: A E Pasquino

A E Pasquino — Thu, 21 Apr 2011 17:53:20 +0000

At what point is wealth pooled at the top considered unproductive? When it steals spendable income from lower quintiles it slows the demand economy, which no serious producer or merchant desires. A broader prosperity makes a healthier economy and a better society. I wonder why the modern Republicans find this so repellent. As if the word “good” is suspect when it’s paired with “public” or “broader”. It isn’t a redistribution of wealth that’s demanded (though we might wish it), it’s a proper distribution of reward for work. Does a hedge fund manager produce more in an hour than a high school teacher does in a year? Power and advantage reaps far too much reward relative to the good produced, if any. Often, at that level, the only good produced is for oneself. Fairer economies function better.

By: Asymptosis » Wealth Equality and Prosperity

Asymptosis » Wealth Equality and Prosperity — Thu, 17 Dec 2009 20:46:06 +0000

[...] Alms’ piece in the NYT about consumption versus income inequality in the U.S., Lane Kenworthy has pointed out that they’re both utterly dwarfed by wealth [...]

By: Cato Unbound » Blog Archive » Is Consumption the Grail for Inequality Skeptics?

Wed, 14 Oct 2009 14:39:48 +0000

[...] This is a key part of the reason why the distribution of wealth is much more unequal than the distribution of [...]

By: » Nierówność majątkowa, dochodowa i konsumpcyjna Trystero: Niezależny blog finansowy

Fri, 21 Aug 2009 18:17:46 +0000

[...] inwestuje i oszczędza. Efektem tego jest naturalnie, akumulacja kapitału w rękach najbogatszych co najlepiej pokazuje dysproporcja poszczególnych grup społeczeństwa w udziale w dochodach ogół… Za Edward Wolff via Lane Kenworthy Podziel się z [...]

By: Thinking Clearly about Inequality « Rortybomb

Thinking Clearly about Inequality « Rortybomb — Mon, 20 Jul 2009 15:14:48 +0000

[...] in the bottom quintile famously consume $18,000 while only earning $11K-15K. There’s a lot of debate on how to interpret that [...]

By: Inequality and Prices « Consider the Evidence

Inequality and Prices « Consider the Evidence — Tue, 20 May 2008 11:26:12 +0000

[...] is worth paying attention to. But income is important in its own right because it confers capabilities to make choices. What matters, in this view, is what you are able [...]

By: Steve Roth

Steve Roth — Thu, 28 Feb 2008 01:55:37 +0000

I don’t know why it took me so long to realize this, and I’m utterly at a loss as to why better-equipped souls like Paul Krugman didn’t realize it instantly. Cox and Alm do, after all, point out the fundamental failing of their whole analysis:

“While some of these families are mired in poverty, many (the exact proportion is unclear) are headed by retirees and those temporarily between jobs, and thus their low income total doesn’t accurately reflect their long-term financial status.”

Retirees—and the presumably gigantic gap between their collective (non)earnings and spendings—have to be a huge factor. And, uh…students? Who are being supported by well- or at least better-off parents who are nevertheless not part of the “household”?

The sticky issue of “life stages” (my children earn nothing, but the little hoodlums sure seem to consume a lot) is basic to the most freshman-level macro-equity analysis. Why aren’t people who know better pointing this out?

Absent this “unclear” information, the whole Cox and Alm thing seems to tell us exactly…nothing.

By: Steve Roth

Steve Roth — Fri, 15 Feb 2008 01:28:49 +0000

This really got me wondering, yet again some more, about wealth inequality: does it correlate with faster economic growth (in developed countries)?

Went digging and came up with some tentative answers, across multiple OECD countries:

http://trueconservative.typepad.com/trueconservative/2008/02/wealth-equality.html

By: pushmedia1

pushmedia1 — Tue, 12 Feb 2008 19:00:10 +0000

If our conscience screams for redistribution, then why all the numbers?

By: maximilian oberbauer

maximilian oberbauer — Tue, 12 Feb 2008 18:58:50 +0000

am I just confused, or is the previous posting missing quite a lot of points?
The principal reason for policies that alleviate poverty is moral, that is, our conscience “screams for … redistribution.”, not some numbers.
The point about credit is very well taken, because it is a problem if people have to issue obligations (not just running up their credit card) that might last very long, just to finance their daily lives.

By: EconTech » Via Thoma: Kenworthy on Income/Consumption/Wealth Inequality

EconTech » Via Thoma: Kenworthy on Income/Consumption/Wealth Inequality — Tue, 12 Feb 2008 14:41:32 +0000

[...] Spending Inequality, Wealth Inequality” Lane Kenworthy, with another informative post, has useful additions to the discussion over the Cox and Alm claim that consumption inequality is less pronounced than [...]

By: pushmedia1

pushmedia1 — Tue, 12 Feb 2008 08:16:16 +0000

Those in the lowest quintiles of the distribution of wealth are disproportionately young and old families. Young families will draw down on their savings (aka borrow) to smooth their consumption in the anticipation of higher incomes in the future. Sometimes this dissavings is actually the mis-measurement of investment in human capital (aka college).

The old will drawn down on their savings because they’re retired.

In this way, as you say, wealth inequality is the flip side of consumption inequality. But I don’t think this life-cycle take on the data screams for the need for redistribution.

Cox and Alm’s point is that income and wealth are instrumental for consumption, not ends in themselves. If you want to track the variance in well-being in society, it makes sense to look at the variance of consumption. Despite Thoma’s misgivings about it, consumption, as a single measure, is the best aggregate measure of well-being we have and we can’t measure “level of participation” (or whatever his definition of poverty is).