Ah, the rich are becoming richer, and the poor are becoming poor. Starbucks drinks, video gameplay, iPhone-Pocking World of the World Unite!
Anyway, that's what it is.
This could essentially be a message delivered by Scott Galloway, a podcaster and marketing professor at the Stern School of Business at New York University. In Joe's appearance on the morning, calling President Donald Trump a “rebel and rapist,” Galloway argued that “income inequality” was bringing us closer to revolution. But is that?
Or is it the perception that you would do that?
In this context, is the typical presentation of income statistics enlightening or deceptive?
And most importantly, is “inequality” really important? What does it actually teach you in its own right?
Class Wharf Arccard
Galloway argued that a quality-driven revolution without revenue is ongoing. A financial article posted yesterday by MSN.com (originally published last month) has been reported in Joe's appearance in the morning.
“Whether CEOs are murdered on the streets, whether it's the 'metoo' movement, where there's the right element, whether black lives matter. What are these movements? They target wealthy people,” Galloway said on the show. “We are in the midst of a series of small revolutions to correct income inequality.”
(Note: Galloway's BLM and #MeToo examples are not really close here.)
MoneyWise advances his paper on Galloway, saying that past revolutions have been born out of “inequality.” The outlet also cites sources from a handful of experts who talk about “inequality” that creates social unrest. And after citing the French Revolution, where the rich royals were placed under the guillotine, MoneyWise writes:
In the United States, income inequality has been rising for decades. According to the Peter G. Petersen (SIC) Foundation (PGPF), the top 20% of the wealthiest households in America increased their income by 165% between 1981 and 2021, with only 33 medium and lowest quintiles. We are seeing an increase in revenue of %. 38% each during the same period.
Under which shells are the peas?
It's suspicious when people start to debate inequality using “quintiles” (the five parts of a data set divided into 5). You probably have (just like when an economist cites “family income” rather than individual income).
First, all the bottom four income quintiles have caps (grown progressively over time). Therefore, when individuals within the bottom 4 quintile exceed their limit, they rise to the next quintile. But this doesn't apply to the best quintiles. Because there is no cap and there is no other place to go. Therefore, there can only be one increase in the wealth of an individual within that class. It's about increasing your average income. Therefore, it is understandable that the gap between the 15th and 15th quartiles may grow just as the wealth of the people is rising. (Imagine the effect of averaging the world's Elon Musk, Bill Gates and Warren Buffets in their top five.)
As mentioned above, Americans move between these quintiles. As late economist Walter E. Williams wrote in 2006, it relates to the results of a study assessing over 50,000 families.
In 1975, only 5% of families with bottom income quintiles (minimum 20%) in 1975 were still there. Three-quarters of these families moved to three highest income quintiles. During the same period, 70% of the second lowest income quintile moved to the higher quintile, with 25% moving to the highest income quintile. For example, if the Census Bureau reports that the poverty rate in 1980 was 15% and 15% after 10 years, then most of the time they refer to different people.
(Note: The new study paints the same picture. I quoted Williams because it was concise.)
Rich, poor man – one man in his hand?
Furthermore, financial information about cherry blossoms from its source, PGPF, will debate inequality. In fact, the PGPF line was shortly after the quote told the story. Witt: “These statistics do not take into account the impact of taxes or transfer programs…”
And that's some of the effects. As notified in 2022 by Kato Institute:
Official statistics on economic well-being distort public policy dialogue.
Do not exceed two-thirds of the relocation payments the government provides to low-income households. Don't reduce the income the government takes as tax. This is an average of 35% of the highest quintile income. And adjust inflation using the most inaccurate price index.
As a result, the Official Statistics Bureau exaggerates income inequality four times, claiming that inequality is rising when it has actually declined for the past 70 years. Similarly, the official poverty count is ten times the actual number.
Kato buttresses the first point and writes:
Adding these missing transfer payments will increase your income earned in the lowest quintile by almost 700%, and more than 70% in the second quintile. For higher quintiles, the lack of transfers is small, primarily due to Medicare in older people.
Total transfer payments reduce income inequality by 90% from 60.3 to 1 to 5.7 to 1.
Equality fiction
If Cato is correct, you need to know that inequality is decreasing over time. But there are more important things to know:
Equality is irrelevant.
Really.
This is explained in detail in the following example:
Imagine two tennis centres training their children. After the first period, all children are advanced beginners. After the second same period, some are also advanced beginners. However, the other two large groups constitute low intermediates and intermediates, respectively. Plus, there is a small group of senior players, but a few others are approaching the tournament caliber. Which centres have more equality?
So, are kids getting much better on average now?
Lesson: Equality teaches nothing about quality. That's completely irrelevant.
This is related to everything in life. When I ask the doctor after seeing my son, “How about my boy?” And he simply replies, “His health is on par with the health of all my other patients,” you are satisfied Would you like to do it? Can you draw comfort from his reaction? He probably works in the children's cancer ward.
Similarly, if everyone is making $500 a day, or $1 a day, then there could be a full income equality. What's related is how much more Musk, Gates, Buffett and others make than we do. What's relevant is whether you can afford life essentials and some luxury items and save money for retirement. The key is that we can live well.
Is it close to a revolution?
Now we're back to Galloway's paper. Can such inequality in itself really bring us closer to revolution? Here, consider Uzbekistan has a small annual per capita income of $2,700. This country is also ranked in the bottom 50% of countries with income equality.
However, it is probably recognized as the safest country in Central Asia. There is no revenue-driven revolutionary bubble. explanation?
Uzbek is entitled to earn $180,000 immediately after graduating from university and does not feel he can soon buy a great car and a beautiful home. The difference is expectations.
So, no, inequality in itself does not cause a revolution. But focusing on it exacerbates the spirit of already present qualifications and the spirit of corruption vy hope.
