“The US economy of real people – the usual numbers, but with everyone who from birth is worth over $1M omitted from the data.”

Averages, trends, recession analysis, the works. That… that would be a fascinating read, and a really compelling PR piece. We know that income mobility sucks in (your) country – so remove all sympathy for those who made it via their own bootstraps from the equation, and you’re left with a group for whom just about nobody has any sympathy at all. The massive difference in the economic numbers should be illuminating indeed…

from 1979 to 2004, the percentage of households in the “middle class” category—those with incomes between $30,000 and $90,000—fell from 47 percent to 39 percent

I’ve got to call ‘misuse of statistics’ on this one, Tula. I’m sitting here with the Census Bureau’s Income, Poverty, and Health Insurance Coverage in the United States: 2005 in my lap, and while it shows (using slightly different lines of demarcation, mostly at multiples of $25K rather than $30K) that the groups in the middle have shrunk a bit over that interval, it’s because overall, people have been getting richer, but at different speeds: the under $30K group has shrunk, and the over $90K group has grown. There’s been more of the latter than the former, which is why the group in the middle has shrunk, but still, that movement is a good thing.

That said, let me re-tell the story.

Between 1979 and 2000, all the low to middle income groups shrunk as a proportion of the population, in inflation-adjusted dollars, as an additional 12% of Americans moved into the top two groups from the lower groups:

Population Proportions
Income 1979 2000
… 0-5K .. 2.6 2.6
. 5-10K .. 7.0 4.8
10-15K .. 7.2 6.3
15-25K 13.4 12.0
25-35K 12.9 11.6
35-50K 17.2 14.9
50-75K 21.5 18.7
75-100K 9.9 11.9
.. >100K 8.3 17.2

Households were moving up the income ladder; the ‘middle’ was moving upwards.

Then from 2000 to 2005, that process reversed itself:

Population Proportions
Income 2000 2005
… 0-5K .. 2.6 3.3
. 5-10K .. 4.8 5.0
10-15K .. 6.3 6.4
15-25K 12.0 12.4
25-35K 11.6 11.4
35-50K 14.9 14.9
50-75K 18.7 18.4
75-100K 11.9 11.1
.. >100K 17.2 17.2

All the groups over 25K shrunk or stayed constant, but all the groups under 25K grew.

Moral: Bush is bad for average Americans.

That workers are only getting a small fraction of our economy’s productivity gains in their paychecks is the problem. That the 30-90K income group is shrinking as a proportion of all households is NOT a problem.

gkerby-

my comment didn’t post, so here it is again…….

i see that you got all of the facts you needed…

GREAT LETTER!!!!!!

Thanks. I spotted a couple of minor typos that I didn’t see before I emailed it, but nothing of consequence. That always happens when I proof my own writing!

(snip) …it is not in China’s self-interest to do anything that would disturb the value of that asset. Shorter version: large debtors own the bank.

Can China act in its own self-interest? Can any country?

Look at their pollution problem – 70% of surface water supplies polluted and unhealthful. Sound bad?

CHINA 90% of cities have polluted underground water

“Water pollution causes direct economic losses of tens of billion of yuan, or billions of US dollars, not to mention countless indirect losses,” added Zhang. Beijing’s counter-strategy “in the next 25 years” will be decisive in limiting the deterioration in quality of water supplies.

China can no more act in their own best interests than we (the US) can stop global dessication with deregulation.

No, the answer is not a pie in the sky tech-fix. It isn’t even thinkable how to curtail our human induced climate disaster. Moreover, we have no idea how to change our lifestyles to comport with an austere [read: sustainable] energy budget.

It is up to Nature now. Humans lost control the moment they thought they had Dominion over Life On Earth. T’ain’t so.

Now everything is just tainted…

To become affected with decay or putrefaction; spoil.

my comment didn’t post, so here it is again…….

i see that you got all of the facts you needed…

GREAT LETTER!!!!!!

just caught up, see you already had plenty of facts now……

GREAT LETTER!!!!!!!!!!!

Dang, Republican Math is weird.

I’d be willing to bet that all the people who complain about having to pay higher wages are making more than $90,000 a year. They ought to try living on ‘middle income’ in some place like Los Angeles or New York where even rent is pushing the limit for the middle class. If you want to go someplace less expensive than LA, your choice is someplace hotter in the summer, with either a longer commute to the current job, or a new job that pays less money (but the expenses other than housing will, believe me, not go down).

The biggest and most influential complainers are tenured professors of economics. I know. I’m one of them. It sounds so good — free trade, anti-cartel (including anti-labour cartels). It all works out in the elementary theory we teach our first-year grad students. Few of my colleagues have ever lived in a situation where they were actually told what to do, and do it or get fired. They are independent entrepreneurs, with the real added benefit of assuming no risk because their jobs are ensured. Nice work if you can get it. I love it!

Many — I think perhaps most — of them are idealists in a twisted sort of way. They think that if the dream world of the principles book could ever be made to come to pass, the world would be in a perfect state and on automatic polite for the rest of eternity. These are, as you might infer, not deep thinkers. It’s like I always say: The University of Chicago Department of Economics does an exceptional job of turning first-class minds and third-class minds into second-class minds.