Monday, October 10, 2011

Today in inequality reading: Americans are getting poorer

WASHINGTON — In a grim sign of the enduring nature of the economic slump, household income declined more in the two years after the recession ended than it did during the recession itself, new research has found.

Between June 2009, when the recession officially ended, and June 2011, inflation-adjusted median household income fell 6.7 percent, to $49,909, according to a study by two former Census Bureau officials. During the recession — from December 2007 to June 2009 — household income fell 3.2 percent.

The finding helps explain why Americans’ attitudes toward the economy, the country’s direction and its political leaders have continued to sour even as the economy has been growing. Unhappiness and anger have come to dominate the political scene, including the early stages of the 2012 presidential campaign.

It's this kind of dynamic that helps create the "Occupy Wall Street" movement.


namefromthepast said...

What is of immeasurably more consequence is the continued erosion of the value of that income.

The dollar index fell from an 92 to around a 75 vs basket due to our inability to deal with our debt, QE, among other things.

This is a 23% decline in indexed purchasing power over article's referenced timeframe. BTW-gold a longstanding inflationery hedge and dollar value hedge increased by 40% over this timeframe.

When(if)the economy recovers the amount of wealth stolen by government for their big business allies from savings accounts, pensions, social security, etc, will become clear.

Therefore the occupy wall street simpletons are encouraged by the liberal left-wing because it deflects attention from a complex issue inherent in the good cop/bad cop ploy used by the big gov't/big biz alliance.

Referencing the amount of dollars to reflect "richer or poorer" appears to be a complete waste of energy until you realize the NYT's purpose isn't to inform but rather to incite.

Notorious Ph.D. said...

This may be the first time I find myself in at least partial agreement with namefromthepast: even if numerical incomes increase or remain stable, it's important to keep an eye on the value of that income, in relation to the price of housing, groceries, higher education, etc. Some of that is due to international financial markets and nervousness about mounting U.S. debts and ability to pay said debts, others with increasing cost of goods and services in general (something that, in and of itself, is quite complex).

Where I disagree is in the critique of the Occupy movement. I think there are a lot of things to critique here, certainly. But "they're not addressing the real complexity" is not one of them. Can you imagine how big that sign would have to be? Or, to put it less frivolously: the movement is trying to address the most obvious signs of simple-cause malfeasance. More strictly regulating the financial behavior of large corporations is going for low-hanging fruit, and it makes sense to go for that first, because it's easiest to remedy. The underlying systemic problems also need to be addressed, but short of tearing the whole system down and starting over again, there's no way to do it all at once.

namefromthepast said...

My contention is that large corporations want to be more strictly regulated and there are more than enough liberals and some Republicans eager to please.

When a business becomes so enormous it also becomes a huge and easy target for smaller more agile companies to come in and chip away at market share.

Smaller companies in most areas are more efficient and responsive to consumer needs and big business is well aware of it.

With too many fronts to defend in a truly market driven environment big business can call on government to impose strict, costly regulations to restrict a small startup company from entering the market.

In terms of regulating financial institutions the most fair penalty for any business is one of natural consequences.

When taxpayers regulate then bailout businesses for engaging in bad business it just encourages more bad business more bailouts and more misdirected anger and frustration which leads to more regulation.