Why Wealth Flows Up

I've been trying to figure out why the wealthy get wealthier unless there's some strong societal pressure to keep things even kind of equal. Turns out I'm not the only one. Here's a study, complete with calculus, explaining all about it.

http://www.growthcommission.org/storage/cgdev/documents/EquityandGrowth/Bowles.pdf

Basically, the answer is inheritance. And capital. If you have inherited money, then you can use that money to make more money--you have a head start. Inheriting social position is at least as useful, in that you have a built-in set of people to help you along.

Here's an article discussing wealth inheritance specifically in the US. http://www.economicmobility.org/assets/pdfs/EMP_LitReview_Wealth.pdf It comes to the conclusion that between 45% and 80% of all US wealth is inherited. Nice, if you choose your parents carefully enough.

And, another paper: http://www.nber.org/~denardim/research/denardi.pdf

Have I mentioned lately how good it is to be rich?

The real beneficiaries of the explosion in income for top earners since the 1970s has been not the top 1 per cent but the top 0.1 per cent of the general population. Since 1974, the share of national income of the top 0.1 per cent of Americans has grown from 2.7 to 12.3 per cent of the total, a truly mind-boggling level of redistribution from the have-nots to the haves.

From The London Review of Books.

If our sons die to protect their interests they should have to pay more taxes.

That's what it is, after all.  The whole weight of the American military is used to protect the interests of the wealthy amongst us, and to enhance (through privatization) those interests.  Gah.  Tax the wealthy some reasonable amount. And reinstate the estate tax to some reasonable level. 

Badly done drawing of how much fun it is to be Halliburton feedback loop:

If people die for you, actually die for you and your interests, don't you owe them something?

Bach my way

It's a new world; I follow where his fugues go. It's a rather windy road. Along one of those turns, I ran across "Sacred Masterpieces/Cantatas," a 22 CD set of Bach's church music; including the magisterial Mass in B minor and the equally adjective-worthy St. Matthew's Passion. Along with a harpsichord-full of motets, odes, cantatas and the occasional piece Bach would dash off at lunch. 53 bucks. Everyone run out right now. I don't have the money, but I could not resist. Imagine zombie djinn muttering "Bach" when all the other zombies are saying "brains" and looking at me funny.

Willard Milton Romney

Is running for president. I think there should be a truth in names act, to go along with the new Arizona birther bill. But wait! Romney hasn't released his birth certificate yet, so maybe he can't run in Arizona. Where was he born? Detroit? Really? But his dad was born in Mexico. Milton is clearly as much an illegal alien as Obama. I sense a controversy. Sorry, Willard.

Choice is bad.

Not that kind of choice; that's wonderful, magical, and life-saving. Bad choice is me with Blogger templates. So many choices; so many of them terrible.

Deficits = Prosperity; Surpluses = Depression

Economics is hard.  That whole "humans behave rationally" axiom that economists rely on has always made me suspicious.  More than suspicious, actually.  Humans are not rational; we're herd animals, we're part of a crowd.

History, however, can tell us how humans, faced with certain conditions, have behaved in the past.

All through the Bush years, no one paid any attention to the fact that the US government was spending money first like a drunken Yale fratboy and then like a drunken Harvard MBA.  Now Obama is president, all of a sudden everyone is worried about our deficit.  Why?  Really, why?


W

ith one brief exception, the federal government has been in debt every year since 1776. In January 1835, for the first and only time in U.S. history, the public debt was retired, and a budget surplus was maintained for the next two years in order to accumulate what Treasury Secretary Levi Woodbury called “a fund to meet future deficits.” In 1837 the economy collapsed into a deep depression that drove the budget into deficit, and the federal government has been in debt ever since. Since 1776 there have been exactly seven periods of substantial budget surpluses and significant reduction of the debt. From 1817 to 1821 the national debt fell by 29 percent; from 1823 to 1836 it was eliminated (Jackson’s efforts); from 1852 to 1857 it fell by 59 percent, from 1867 to 1873 by 27 percent, from 1880 to 1893 by more than 50 percent, and from 1920 to 1930 by about a third. Of course, the last time we ran a budget surplus was during the Clinton years. Has any household been able to run budget deficits for approximately 190 out of the past 230-odd years, and to accumulate debt virtually nonstop since 1837? As discussed above, there are firms that grow their debt year-after-year so it is conceivable that one might be found with a record of “profligate” spending to match the federal government’s. Still, the claim might be that firms go into debt to increase productive capacity and thus profitability, while government’s spending is largely “consumption”.
Fourth, the United States has also experienced six periods of depression that began in 1819, 1837, 1857, 1873, 1893, and 1929. Therefore, every significant reduction of the outstanding debt, with the exception of the Clinton surpluses, has been followed by a depression, and every depression has been preceded by significant debt reduction. The Clinton surplus was followed by the Bush recession, a speculative private-debt fueled euphoria, and then the collapse in which we now find ourselves. The jury is still out on whether we might yet suffer another great depression. While we cannot rule out coincidences, seven surpluses followed by six and a half depressions (with some possibility for making it the perfect seven) should raise some eyebrows. And, as we will show below, our less serious downturns in the postwar period have almost always been preceded by reductions of federal budget deficits.

From http://www.nakedcapitalism.com/2010/04/marshall-auerback-troubles-in-the-eurozone-will-the-contagion-affect-the-u-s.html#comments

List of Recessions in the US http://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States

US budget--historical  http://www.gpoaccess.gov/usbudget/fy10/hist.html

Jeff Buckley knows it's over; the Smiths, not so much

Considering the life of Jeff Buckley, this song is simultaneously perfect and just about impossible to listen to.

The sea wants to take me. I know it's over, still I cling. If you're still funny, why are you on your own tonight? And if you are so clever, why are you on your own tonight, and if you are so very entertaining why are you on your own tonight? Love is natural and real, but not for you and I, tonight.

Bonus (and so obscure) cover:


One more: Who knew these existed?

Sorry, world.

Sorry, world--politicians--global warming deniers--people listening to U2 unironically; I judge you harshly because I come from a place of love.

(Just trying out my new meme.) ((GeeBee tells me I'm the only human who thinks that U2 is, uh, how do I say this, uh, LAME. Maybe knowing that will make the post make marginally more sense. Then again, maybe not.))

Never put off until tomorrow what you can do the day after tomorrow. --Mark Twain

Procrastination is one of the delights of life.  How I savor these last few days before taxes are due.  Such a rush!  Some people ski, or jump out of airplanes, or surf; I get all that fun and more by waiting until the last minute.  Plus, no special clothes are required.

Favorite activity while procastinating? Either daydreaming or listening to "Daydream Nation". If I'm feeling particularly driven, I may do both simultaneously, not to brag.

Queen Elvis

Perhaps inspired by fried chicken sushi, I decided that we all should listen to some Robyn Hitchcock. Sadly underrated.   What do you need to know about him?  There was a documentary about him called "Sex, Food, Death, and Insects."  Nuf said.



People get what they deserve
Time is round and space is curved
Honey, have you got the nerve
To be Queen Elvis?

Fried Chicken and Sushi

I thought I'd post something not too depressing for a change.   I mean, the sun is shining,  my syringa unknown pink bush, (see below)

is attracting bees, both europeanized and bumble, and miss hummingbird is out.

Plus, a new restaurant, Uchu, that will be serving sushi and fried chicken (!!!!) will be opening soon just a few blocks from our house. I can't wait. Rumor had it that it was to open today, but GeeBee and I just strolled on past and no sushi for me. I really want to see sushi made with rice and a chicken drumstick all wrapped in seaweed, with dots of sriracha. (As an aside, did you know that drumsticks have a butt and a shaft? True Story.) I should be able to think of an amusing name for it, but all I've got is either a "Moon over Tokyo roll", or a "Tombstone Blues roll"; the sushi's not yellow, it's chicken. Sigh.

Or, there's always the McNuggets Roll.

Why I fear for my beloved country, part zillion

Because we're losing the middle class.  And when it goes,we spiral down fast until we're at third world status.  Other countries have gone down the exact same path we're trodding, with dependable--bad--results.

Mexico in the 70's was building a middle class until it slashed spending on transportation, health care, and education.  Poof.  As an article from 2002 in the New York Times said:

The development of a middle class was a shining achievement of the Mexican revolution, said the historian Lorenzo Meyer. Incubated in a closed economy that was driven by state-owned monopolies, the middle class grew steadily from the 1920's to the 1970's. Faced with declining economic efficiency and a mounting public debt, successive presidents opened Mexico's protected economy, igniting an industrial revolution that turned the country into one of the world's leading exporters.
In an effort to reduce its external debt, the government simultaneously slashed spending for higher education, transportation and health care - all traditional pillars of middle-class life.  Found here.

Your defect is a propensity to hate everybody

The inadvertently untrustworthy narrator is one of the joys of fiction. Who can forget Mr. Collins in Pride and Prejudice who holds such a high opinion of himself:

"My dear Miss Elizabeth, I have the highest opinion in the world of your excellent judgment in all matters within the scope of your understanding." Dear reader feels slightly different. Dear readers, a host  of Mr./Mrs. Collinses! (Hostess, acually; as proper ladies I'm sure they would insist on the gendered form.)  Here is a sample:

"I hope she forgives me my judgment. It comes from a place of love.”

I think I'm going to adopt that as my new meme. Even though it has this slight hint of the off-color; like that time we heard, from a nearby campfire, someone singing "Jesus, come unto me."

(Judgmental--but only because she comes from a place of love--lady to the left.  On edit, this isn't really fair to Emily, over there.  She isn't cruel, she's just a bit inept.)

Of course I have my own bizarre list of reasons to look down on others.  Groups I feel free to mock:  those that wear polo shirts unironically, those that listen to Herbie Hancock (sorry, George); those unenlightened souls that don't realize the color orange is a neutral; heretics--heretics, I say--that use salted butter.  The list could go on. But my mockery should be forgiven, as it comes from a place of love, the place might even be a McMansion, even.

Hummingbirds

My daughter left home, my home, recently. With no children to worry about I've transferred my neuroticism to an innocent little bird. A hummingbird, to be exact. I think it's an Anna's female, but all those darn hummingbird females have metallic green backs and whitish throats. Plus they move very fast.

She flits around outside my dining room window pretty much every morning. I worry.

Picture, certainly not mine, found here.