Stalking Points

In the course of looking for something else I stumbled across this Times Select "Talking Points" column by Teresa Tritch, who is, we are told, "an Editorial Board member [who] writes about economic issues and tax policy".

The topic of the column is rising income inequality in the United States and Ms. Tritch mimics the astonishing intellectual feat performed by Paul Krugman when he wrote virtually the same piece for the NY Times magazine a few years ago - nowhere does Ms. Tritch make any mention of the effect of immigration on income inequality.

By way of contrast, Prof. Rosenthal (cited with admiration by Paul Krugman) devotes a section to immigration in his own paper reviewing the subject of inequality.  A snippet:

What is shown in figure 8 echoes more detailed studies of the economic consequences of immigration. These results were summarized by Bean and Bell-Rose (1999, p. 13):

…the most authoritative assessment of immigration’s economic consequences has been carried out by the National Research Council…The Council reached two major conclusions: Immigration exerts a positive effect on the U.S. economy overall but only a small adverse impact on the wage and employment opportunities of competing native groups; and immigration benefits high-skilled workers and the owners of capital but not low-skilled workers or those who do not own capital. … recent immigration … appears
to have exerted negative effects on the economic situation of African Americans. …. This is perhaps not surprising given that … benefits [of immigration] were concentrated among the highly skilled and the owners of capital, both of which groups include disproportionately fewer African Americans than whites.

The Bean and Bell-Rose summary stresses small losses at the bottom and big gains at the top of the economic hill. This finding is consistent with the evolution of the overall income distribution that I noted above—treading water or slight retrogression of real incomes at the bottom and large increases at the top. To the extent that low-skilled immigration has contributed to the increase in inequality, public policy, expressed in the abandonment of discriminatory national quotas, rather than technology, has been a driving force.

I don't understand how, with immigration reform in the news and in the Sunday Times Magazine, Ms. Tritch could have overlooked this.

I TAKE A DEPLORABLE CHEAP SHOT: This from Ms. Tritch is gibberish:

The trend toward increasing inequality was interrupted, briefly, in the late 1990’s. Productivity growth rebounded, and for a half decade, all income groups participated in the prosperity. Even then, the richest Americans had the best run, propelled largely by stock market gains. In fact, when the stock market hit its all time high in 2000, post-war income concentration also peaked.

In other words, the trend towards rising inequality was reversed in the late 90's, yet income concentrations rose until the market crash in 2000?  Please.  What she wants to say, I think, is that prior to the mid 90's, the lower income groups had stagnant real incomes; in that period, national income rose, all of the gains went to the upper income groups, and inequality rose.

However, from 1995 forward the incomes of the bottom groups began to grow (the trend of stagnant incomes ended).  However, the incomes of higher groups also grew, and more quickly, so that income inequalty continued to rise.  This chart on p. 2, showing the income share of the top 1%, certainly does not indicate any interruption in the trend towards rising inquality in the late 90's.

Comments

[Neo]

Gee, when you have a progressive tax system that makes the rich pay more taxes, guess who the government decides to make richer when they need more revenue ?
10 points if you said the rich.

[Neo]

And I like the part in the chart that show that the richer were richer, in fact the richest in 70 years, during the last years of the Clinton Administration. I wonder how that happened.

Democrats making the rich richer .. oh darn those Democrats and their rich friends .. and balancing the budget at the same time.

One is left to wonder why Al Gore didn't talk about this during the 2000 campaign. Sounds like a winner. Maybe it was that the last recession started a month before the election.

[Robin Roberts]

TM, you were able to make that much sense out of her gibberish?

[cathyf]

The WSJ had a piece on the Democrats latching onto income inequality as a campaign issue. One of the statistics that they quote:

Over the last 25 years, the average hourly wages of high scool dropouts fell by nearly 20% (after adjustment for inflation) while those of holders of advanced degrees rose by nearly 30%, according to the Economic Policy Institute.

Hey, I have this idea!!! How about if we set it up so that every resident of the United States can get an education up through the 12th grade completely free? How about if we set up subsidized colleges and graduate schools throughout the country? What about grant programs where poor students can get money for college and graduate school? How about subsidized low-interest loan programs for people to go to college and graduate school?

Imagine how wonderful it would be if everyone had the opportunity to get a K-12 education completely free! Imagine how wonderful it would be if everyone had access to college and graduate school with minimal sacrifices!

Imagine!

cathy :-)

[Jos Bleau]

Suggesting the winning slogan for Times-ians in 2006 "Our billionaires say - hate the McMansions, not the plutocrats"

[Ari Tai]

Someone should take a look at the costs of regulation on salaries (esp. the poor). By the numbers (raw headcount), most of the benefits accrue to the majority of people (those 60-70% that can't / won't buy something better, or move to a much nicer place, aka poor and middle class). Is it possible that they are bearing all these costs and that's where their pay has gone?

Cato and others have estimates in the area of $10K a year, added mostly since the early 90s, with a big lump from Mr. Clinton in presidential directives as he was leaving office (arsenic limits, etc.).

Unlike taxes (where the rich can and do pay most of the bill), it's very hard to make the costs of regulation graduated or means-tested. They (must be) regressive (unless we move to something other than free markets with a free people).

Answer is both less regulation (sunset laws that remove), and a more disciplined form of regulation that doesn't play favorites or pervert markets. Perhaps no regulation that takes more than 1 page to fully document and clearly state in 6th grade English (a "truth in regulation act"). And limit any corpus of regulation for any industry segment of > $1B/year or > 5 million customers served that takes to less than 100 pages. And 10 pages for smaller segments.

Starting with the tax code. :-)

Well, I can dream.

Note that the worst buying-of-influence challenge is regulation in the presence of globalization. It is bad enough when American companies rent-seek in Congress. It's guaranteed to fester and corrupt absolutely when international.

The answer is much less & simple & uniform regulation, wherever possible removing regulation and fostering competition (not by hamstringing the dominant companies but rewarding investment and risk takers). The private sector will outspend and out-innovate any government "investment" in, say, clean air, guaranteed.

[ed]

Hmmmm.

Gee, when you have a progressive tax system that makes the rich pay more taxes, guess who the government decides to make richer when they need more revenue ? 10 points if you said the rich.

Well that was astonishingly ignorant.

Soooooooo. Nice tinfoil hat btw.

Assuming you're correct then your position is that the right thing for a government to do is to *reduce* the wealth of wealthy people, the source of most taxes, in order to .... reduce the government's income from taxes? Well that works. Especially if it's done perfectly then there won't be any wealthy people and taxes would approach zero.

Like Zimbabwe.

[Harry Arthur]

I like Cathy's idea. Maybe we should try it.

The problem with all discussions on income distribution is the simple fact that from the bottom there is only one way to go - up to higher income levels. In short, there is a bottom but no real top, so the income distribution "imbalance" potential has no real limit.

As education and experience inevitably produce higher incomes for most people throughout their working lives, one would assume that the disparity with those on the low end of the scale (relatively uneducated, less experienced, fewer marketable skills, and new entrants to the workforce) would trend towards an increase.

In my opinion this is one of those statistics that is fine for making a class warfare argument but of little real practical use otherwise.

[paul]

The most tired phrase in politics?

"The seperation between rich and poor is widening."

You mean there are now more rich people that can pay taxes to fund social programs for the poor? The rich are getting richer, and thus paying more taxes. Would it be better to have to have less tax money with more people being elevated beyond poverty, but below taxation and fewer rich people paying taxes?

That would keep the seperation of the poor and rich from growing. I thought one of the principals of communism was that everyone would be equal in income, so it doesn't cause disharmony. Sad to see how badly our own situation seems to disturb some people.

I'll bet it burns Krugman's biscuits that businessmen, all dumber than he, are exceeding his current trust fund. At this rate there will be a lot of people with noveau cash eating in Paul's restaraunt, driving up real estate, and...gasp...sending their kids to Princeton.

The barbarians are at Paul's gate.

[ed]

Hmmm.

It probably doesn't help that we're currently importing poverty from Mexico either.

[Sweetie]

I celeberate the NY Times applauding the Clinton years and disparaging the Bush years. In fact, I don't mind them sprinkling in lies and half truths into the mix either.

That's just less column space to provide terrorist intel.

[Neo]

ed:
Take a look at the chart on page two.

Notice that the most recent boom that Dems and Reps will agree was a boom is during the Clinton years, when the revenue was high enough to balance the budget.

Then notice that the wealthy were the richest they had been in 70 years.

When you get 28+% return on a dollar going to the weathy, and 0% on the dollar of those bottom 50% who pay no taxes, it becomes pretty simple to see where to put your dollars to get the best revenue return, the rich.

I know you think this sucks, but it happaens.

Truth is, tax cuts make the rich think it's a good time to take profits.

[Assistant Village Idiot]

There is some wistful hope that we could grow an economy some other way, without anyone getting really rich. It's just, like, so icky.

When the lions do well, so do we hyenas. In fact, we need the lions to do well.

[sam]

07/20/06 nbcsandiego: Local Marine Fights For Life After Bomb Blast
Lance Cpl. Don Fowler...was on his third deployment to Iraq when a suicide bomber detonated a bomb near a hospital... is on his way to a military hospital in Maryland. He is in a drug-induced coma with serious injuries to both his arms and legs.

07/20/06 CSM: The vulnerable line of supply to US troops in Iraq
American forces in Iraq are in danger of having their line of supply cut by guerrillas. Napoleon once said that "an army travels on its stomach." By that he meant that the problem of keeping an army supplied is the prerequisite for the very existence...

07/20/06 NYTimes: In Baghdad, bakers are the targets
BAGHDAD The front line in this city's sectarian war runs through Edrice al-Aaraji's backyard. He is a Shiite and a baker. So are his two brothers..."To shut down a well-known bakery in a neighborhood, that means you paralyze life there,"

07/20/06 DoD: Soldier's injuries lead to heart failure
A Land O'Lakes soldier who was struck by a roadside bomb in Iraq in October died Sunday of heart failure caused by the stress of his injuries. He was 27. Army Spc. Raymond A. Salerno III's ...suffered third-degree burns on both hands...

07/20/06 Reuters: Gunmen kill family in Mosul
Gunmen killed five members of a family -- a man and four women -- in their home in Mosul, 390 km (240 miles) north of Baghdad, police said.

07/20/06 Reuters: Four guards are killed as police chief escapes attack
Brigadier Muhammad Ali, the police chief of the town of Baghdadi in Iraq's western al-Anbar province, said he had escaped a roadside bomb attack on his convoy but four of his guards were killed and two wounded.

07/20/06 DoD Identifies Army Casualty
Sgt. Mark R. Vecchione, 25, of Tucson Ariz, died on July 18 in Ar Ramadi, Iraq, of injuries sustained when an improvised explosive device detonated near his M1A1 Abrams tank. Vecchione was assigned to the 1st Battalion, 37th Armor Regiment

07/20/06 DoD Identifies Marine Casualty
Lance Cpl. Geofrey R. Cayer, 20, of Fitchburg, Mass., died July 18 from a non-hostile incident in Al Anbar province, Iraq. He was assigned to 3rd Battalion, 5th Marine Regiment, 1st Marine Division, I Marine Expeditionary Force

07/20/06 KUNA: Governor of Mosul survives assassination attempt
The governor of Mosul Duraide Muhammad Kashmula survived Thursday an assassination attempt after a bomb exploded near his convoy in the city of Mosul in Northern Iraq.

07/20/06 Salvadoran Soldier Identified
una patrulla de miembros del VI Contingente del Batallón Cuscatlán que se encuentra en Iraq...el Subsargento José Miguel Perdomo sufrió heridas en el costado izquierdo del tórax y falleció mientras era trasladado hacia este centro de atención.

07/20/06 AP: Baghdad attacks up 40 percent
U.S. spokesman Maj. Gen. William Caldwell said there has been an average of 34 attacks a day against U.S. and Iraqi forces in the capital over the past five days. The daily average for the period June 14 until July 13 was 24 a day, he said.

07/20/06 ARNews: Medal of Honor hero greets - Staff Sgt. Josh Forbess
Staff Sgt. Josh Forbess, a burn patient recovering from a 12th surgery after surviving a helicopter crash, said he often thinks the word “hero” is overused, but not in this case.

07/20/06 ARNews: Medal of Honor hero greets - Staff Sgt. Nathan Reed
For Staff Sgt. Nathan Reed, the visit by the Medal of Honor recipient was especially meaningful. Reed, a 4th Infantry Division Soldier, lost his right leg when a roadside bomb exploded May 30 in Baghdad.

07/20/06 AP: Twelve killed after lured near Iraq car bomb (update)
Iraqi police say a car bomb has killed 12 people who had gathered around a vehicle after discovering a corpse inside. A police captain says the victims were staring at the car parked at a gas station when it blew up.

07/20/06 capeargus: Thousands of Iraqis flee as violence reaches new levels
Thousands of Iraqis have fled their homes in fear of sectarian violence that has worsened since the formation of a US-backed national unity government two months ago, official data shows today.

07/20/06 KUNA: MNF chopper crashed in southern Iraq
A Multi-National Forces (MNF) chopper crashed Wednesday in southern Iraq, according to eyewitness reports. Eyewitnesses told KUNA Thursday, a Polish chopper crashd near a MNF military base in Diwaniya, southern Iraq.

07/20/06 AP: Top Shiite cleric calls Iraqis to stop violence against each other
Iraq's top Shiite cleric Thursday called on Iraqis to work together to halt sectarian violence, warning that the future of the nation is at stake.

07/20/06 Reuters: US forces surround Iraq towns in Qaeda operation
U.S. and Iraqi forces surrounded and entered two towns near the northern Iraqi city of Kirkuk on Thursday in search of suspected al Qaeda militants, the military said on Thursday.

07/20/06 NPR: Serious Injury a Daily Risk for Iraqi Soldiers
But when it comes to injured Iraqi troops, there are no reliable numbers. U.S. and Iraqi military officials do agree that the number is much higher. We tell the story of one Iraqi soldier who recently suffered serious injuries while on patrol.

07/20/06 Reuters: Former Baath Party member killed in Kerbala
Gunmen killed a former member of the ousted Baath Party as he was leaving his house in the Shi'ite city of Kerbala, 110 km (68 miles) southwest of Baghdad, police said.

07/20/06 KUNA: Three killed in Baghdad car bomb
Three people were killed Thursday and tens of others injured when a booby-trapped car blasted in Baghdad, Iraqi police announced.

07/20/06 Reuters: Gunmen kidnap and kill policeman in Falluja
Gunmen kidnapped and killed a policeman in Falluja, 50 km (35 miles) west of Baghdad, police said.

07/20/06 Reuters: Two bodies found near Balad
The bodies of two people with gunshot wounds were found near Balad, 80 km (50 miles) north of Baghdad, police said

07/20/06 Reuters: Body of translater found near Tikrit
The body of a translator for U.S. forces was found near Tikrit with gunshot wounds, police said. He was kidnapped on Tuesday, police added.

07/20/06 Reuters: Policeman killed in Tikrit
Gunmen killed a police officer near a checkpoint in Tikrit, 175 km (110 miles) north of Baghdad, police said.

07/20/06 AP: More Hostages Released on Baghdad Street
Four more people seized last weekend at a sports conference have been found blindfolded and dumped unharmed in an east Baghdad neighborhood, officials said Thursday. There was no word on the fate of Iraq's Olympic committee chairman.

07/20/06 KUNA: Up to 10 Iraqis hit by car bomb attack in Kirkuk
Up to 10 Iraqis, including six policemen were injured in Iraq Thursday due to the explosion of a booby-trapped car in the northern Iraqi city of Kirkuk.

07/20/06 kcci: Iowa Soldier Injured In Roadside Bomb Attack
An Iowa soldier is recovering after a roadside bomb attack Sunday in Iraq. Sgt. Justin Abernathy, 24, of Hazleton is receiving treatment at a German hospital. Abernathy is part of the Iowa National Guard's 133rd Infantry B Company.

07/20/06 softpedia: Gruesome Discovery in Baghdad
Iraqi police reported today that it had made one of the most dramatic discoveries ever since sectarian violence escalated in the Iraqi capital, meaning 38 dead bodies that bore the signs of torture, in less than a 24 hour period, CNN informs.

07/20/06 Reuters: Gunmen kill three engineers in Baiji
Gunmen killed three engineers working in the oil refinery in Baiji, 180 km (112 miles) north of Baghdad, police said.

07/20/06 Reuters: Roadside bomb wounds Iraqi army officer in Diwaniya
An Iraqi army officer was wounded when a roadside bomb went off near a joint Iraqi and Polish patrol in the southern city of Diwaniya, 180 km (112 miles) south of Baghdad, the Iraqi army said

07/20/06 Reuters: Gunmen kidnapped and kill taxi driver in Diwaniya
Gunmen kidnapped and killed a taxi driver, who was a former member of the ousted Baath Party, on Thursday in Diwaniya, police said.

07/20/06 Cenctcom: MARINE KILLED IN AL ANBAR PROVINCE
A Marine assigned to 1st Brigade, 1st Armored Division died due to enemy action while operating in Al Anbar Province today.

[Bob]

sam and your point is...

Please give us an update on the innocent souls of Darfur, Somalia, Sudan, South Thailand, Israel...

[Harry Arthur]

I notice that there is no "good news" in your list sam, e.g., improvements in Iraq's econonomy and infrastucture, schools being rebuilt, opportunities created, USW. Other than the fact that the MSM has a clear agenda to present only the "dark side" of this war, why do you suppose that is? If you talk to ANY soldier you'll hear the other side. Probably wouldn't square with your world view, though, so why bother.

[Harry Arthur]

Another minor nitpicky point. I missed the topic on this thread. Did it have the slightest thing to do with Iraq? To quote the quotable ed, "Hmmm."

[Harry Arthur]

Not to mention North Korea, Syria, Iran, China, et al.

[cathyf]

When you get 28+% return on a dollar going to the weathy, and 0% on the dollar of those bottom 50% who pay no taxes

Wait a minute -- I call bullshit. The bottom 50% pay 15%. The middle 45% pay 43%, and the top 5% 28%. (Ok, actually it's a lot more complicated than that -- marginal tax rates bounce up and down like a roller coaster...)

Our overall tax rate is actually pretty flat -- as you would expect when you sum up a progressive tax with a regressive tax.

cathy :-)