Wow. Much of this I knew but one thing that shocked me is that the 10th percentile of wealth in this country is a family with NEGATIVE $2000. If you were dropped into Nebraska from a meteor with nothing in your pocket you wouldn't even be in the bottom tenth.

A sad state of affairs for the "greatest country in the world".

Want to do a survey of how many people in that bottom tenth have an iPhone?

A $600 iPhone is probably one of the best investments you can make if you want to participate in modern society.

Agreed. And iPhones have been around for like a decade and over a billion of them have been produced, so there are plenty of cheap used versions available.

A $150 iPhone 5S is likely a better choice for someone in the bottom 1/10th of wealth.

Want to do a survey of how many people in that bottom tenth have faced massive out of pocket expenses for healthcare and insurance premiums?

iPhones are cheap when they are not purchased new.

Don't be so sure that it's sad. I'm pretty sure there are lots of doctors with negative $2000 net worth or less.

"dropped into Nebraska from a meteor"

Don't you mean Kansas?

The second chart is all you need to look at. It can't be healthy for a society if only the top few percent see any income gains and for the rest incomes stagnate.

It may be all you need to look at if your goal is merely to scoff at the state of affairs and reaffirm your egalitarian self-identity.

If you want to thoroughly understand the problem so that you can reason intelligently about what a solution might look like, you'll probably want more data.

How can that be interpreted in a positive light to have all of the economic gains of a country going to a small few?

Because "income" does not equal "all of the economic gains of a country."

Lots of other things happened in the period in that graph which kept median incomes lower despite economic improvements taking place. Like:

1. The offering of health insurance as a tax-free employment benefit.

2. An increase in divorce rates (households all over cut in half but the median household income didn't drop; there must have been an economic gain distributed to not-rich people for this to happen).

Also, this graph doesn’t say anything about what happened to the size of each of these groups. Pretty sure the biggest trend in America has been the middle class splitting in half between people making more money (and thus becoming part of the "small few") and people making less (which worsens income inequality even though more people are now "rich").

So yeah, there's a lot missing from these graphs.

The goal of the graph is to generalize large scale income distributions/gains on a large sample size of hundreds of millions of people.

Not to go into every single micro sub group of income earners and divorced neurologists with company sponsored health insurance who have more income than an tech worker homeowner with 6 cats.

The graph is perfectly valid for what it represents. The share on a large sample size of hundreds of millions of people of historical income gains and results can be interpreted thusly.

I do t think these charts take into account benefits (I.e. Health insurance) which means that for many people income has not grown, but total compensation has grown, those workers just didn't get to choose where to spend it...

Indeed. In fact, the footnote for that chart acknowledges that:

> Income differences narrow when all taxes and transfers—such as health insurance and in-kind government benefits—are included

https://www.minneapolisfed.org/publications/the-region/where... expounds on a few of the things that have caused household take-home pay to stagnate. The tl;dr there though is:

> Average household size declined substantially during the past 30 years, so household income is being spread across fewer people. The mix of household types—married versus single, young versus old—also changed considerably, so the “median household” in 2006 looks quite different from the “median household” in 1976. Finally, the measure of income used by the Census Bureau to compute household income excludes some rapidly growing sources of income.

Which is all to say that it's a bit more complex than a few charts might immediately make it look. Income inequality has certainly seen an increase, but it's incorrect to characterize it as the upper decile bleeding all the benefits out of the rest of the economy.

In my view health care should be added to inflation. Then the chart would look even worse

Inflation is a monetary phenomenon that affects all prices in the economy. If there's only a price increase in one sector it's by definition not inflation.

Not true. When the oil crisis hit in the 70s for example, inflation spiked. OPEC wasn't a monetary phenomenon.

OPEC did not cause the inflation, nor did the increasing price of oil. During the same period, the US fully abandoned the gold standard and the Federal Reserve pursued a policy of loose money. Here's a brief history:

http://www.investopedia.com/articles/economics/09/1970s-grea...

Wealth is an asset. Health care insurance is not listed as an asset in accounting, it's a risk mitigator, and the premiums are expenses (typically employer expense, is an employee benefit and in the U.S. it's an untaxed benefit but it's still not income on a profit and loss statement, and it's not an asset on a balance sheet).

In that case, think of that chart as representing "buying power," rather than "income."

That doesn't make sense, though, because if your buying power remains stagnant, but you suddenly don't need to buy health insurance with that buying power (because it's handled in the form of pre-takehome compensation), then hasn't your net buying power increased?

No, because the buying power of everyone has gone up in most areas thanks to innovations in technology and entrepreneurship duing the period in the chart.

Side note, in graph 5 the middle one is the "Non-Hispanic African American" category ...

... and have a look at the "data" underneath, a three line set of data with two values coming from Melissa (link to another "local" .xlsx) and a third one which is just a number.

Most probably correct calculations, but no real way to check.

Probably the best bet here is to create mechanisms such that wealthy people who possess an abundance of caring and money can donate that money to the less fortunate, which would have the side effect of levelling the field, and the bonus of not impinging on anyone's liberties.

Pretty sure they already can, but it's not enough, and you end up with a society where the more selfish you are, the more money->power you have.

Tragedy of the commons is not a new concept.

That's not a Tragedy of the Commons. Tragedy of the Commons is what happens when nobody clearly owns something that many people use, so none of them use it responsibly. That's not relevant at all to people hoarding their own wealth.

> That's not a Tragedy of the Commons.

GPs example is exactly game-theoretix tragedy of the commons / prisoners dilemma.

> Tragedy of the Commons is what happens when nobody clearly owns something that many people use, so none of them use it responsibly.

It's specifically, originally, a term for overgrazing a pastureland resulting from the kind of arrangement you described; there are a number of generalizations from that example which have been given the name, including both the one you describe, and the even more general condition in which each player has a dominant strategy of defection even though all players cooperating has a better payoff than all defecting.

The fact that Tragedy of the Commons is a subset of game theory defection problems does not change the fact that its defining requirement is the existence of a "Commons."

The Commons need not be an overgrazed pastureland; it can be any open access resource. The best modern example would be Earth's atmosphere and how its being filled with pollution. GGP has not specified a Commons and the existence of one is not implied in his comment.

> The fact that Tragedy of the Commons is a subset of game theory defection problems does not change the fact that its defining requirement is the existence of a "Commons."

The fact that the term has long been widely accepted as a label for the general class of problems, OTOH, does.

(Arguably, the structure of the payoff matrix in the class of problems implies an economically real if intangible “commons” in any problem in the class, which is probably why the label is used that way.)

Ok, what is the Commons he is talking about?

Presumably the 'Commons' here is control over the government. However, the example is a trivialization of reality and that matters, in the same way that assuming all economic actors are rational matters (they aren't). It's fun when we can use simple laws of nature to make predictions accurately. Unfortunately, it doesn't work in the field of economics\politics almost ever.

You didn't mention the effect of the poor who are now richer getting more power. You didn't mention that people can gain power by being virtuous and admirable, in fact damaging your own interests on purpose is a direct sign of power. Signalling is not a new concept.

The overall effect is more uncertain than you suggest, but presumably it's clear that the 'giving' that is highly desired and publicly demanded by certain people can be implemented by them today.

Further, I'd postulate that the desire to only give if everyone gives is a rather convenient mechanism to simultaneously not give and appear virtuous.

No government income redistribution.. This kills the country.

Lies. The silent generation had a top income tax rate that was never less than 75%, and for a long time it was above 90%. Of course, not maybe people got hit by it because they found ways to avoid it. What ways? Well, by taking deductions that reduced their taxable income below those high brackets. What are tax deductible expenses? Things like charitable donations, and starting or growing a business.

So they had high taxes, massive redistribution that was basically compulsory. The policy was, use it or lose it. You spend it, or we spend it. You don't like how we're spending your money? OK, find a way to spend it differently, take a risk on a business, and deduct those expenses.

Taxes are so cheap at the top end that it's better to pay those taxes, and stuff the remaining money in real estate, the stock market, or bonds, than it is to take the risk on a business. Being a greedy hoarder should be very expensive in terms of taxes. WE've done it before, the country was not killed, instead it thrived. That era of high top end taxes built massive public and private infrastructure.

It's the greedy hoarders who are killing the country. Below a certain level of wealth, saving money is very good. Above a certain amount of wealth, it's very bad. Draw the line to make it really punitive to stay above that line.

Otherwise, you're just a cranky advocate for aristocracy, and oligarchy. And that's what'll kill a country.

People who save money for their families are "greedy hoarders"? I imagine in your eyes, then, people who want to take other people's money are somehow virtuous and charitable?

Key phrasing I intentionally left undefined, because there is valid room for debate, "certain amount". I have no idea what that amount is. $1 million? $10 million? Certainly above $100 million, yes greedy hoarders. And any civilized society would have a 100% inheritance tax on such "certain amounts" of wealth, to prevent the rise of aristocratic families.

Aristocracy is how you turn every damn thing into a product including life. Oh you're sick but you can afford health care, too bad, life is unfair, you die. Oh you're wrongly accused of murder, can't afford a good lawyer, have fun in jail, bye. It makes the entire society untrustworthy, and its stability is specious falling apart abruptly and violently. And that's what we should be trying to avoid.

Where are the Asians on these graphs?

Shush, you're going to ruin the scam for everyone else. ;)