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The rich getting richer in one chart

090810-snapshot.jpg

Think about that for a minute: 64 percent of all income growth since 1979 has gone to the top 10 percent.

Source.

By Ezra Klein  |  September 9, 2010; 5:46 PM ET
Categories:  Charts and Graphs , Inequality  
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Comments

Isn't this the basic thrust of neo-liberal economic policies? Neo-liberalism knows no party.

Posted by: nickthap | September 9, 2010 6:26 PM | Report abuse

How about 2008 and 2009?

Posted by: bgmma50 | September 9, 2010 6:46 PM | Report abuse

i know you're a big fan of these graphs Ezra to drum up the "hate the rich people" schtick but I've gotta say if I'm making saying between $250,000 and$500,000 a year and I lose my job and I can't find a job thereafter don't I fall into the categories of the bottom fifth?

The better and honestly more accurate group would be to show a smaller timeframe (say 10-20 years) and show the exact same individuals. Otherwise the poor will always be poor the rich will always be rich and the middle will always be middle, no? You could though (which wouldn't show up in your charts here) have people that were poor and made it rich or rich people that became destitute.

Or am I reading this chart wrong?

Posted by: visionbrkr | September 9, 2010 7:07 PM | Report abuse

I agree with visionbrkr. This graph is pretty meaningless. There need to be some explanation of how the math was done. People change income groups over the course of a lifetime. How are those folks included in this piechart?

Posted by: Beagle1 | September 9, 2010 7:16 PM | Report abuse

visionbrkr beat me to it, we need to see some longitudinal data here. There is nothing to say that the richest then are the richest now. Likely, many of the richest then are dead.

I was in the bottom fifth ten years ago, probably in the top 10% now. Why would you want policies that make my success a bad thing?

Posted by: staticvars | September 9, 2010 9:20 PM | Report abuse

The Clintons and the Democrats enacted a higher tax rate on the rich in 1992.

Did it in any way slow down the rate at which the rich got richer than the poor?

We as a nation need to ask ourselves if we accept capitalism and its general nature that allows the rich to leverage their access to wealth to create more wealth which will forever allow them to become wealthier faster than those without wealth.

We could choose the Chinese, Russian, or European models where the majority of wealth creation is completely dominated by the politically powerful and there is generally much less of it to go around.

Posted by: FastEddieO007 | September 9, 2010 9:20 PM | Report abuse

Why aren't more people outraged by this disparity in income growth? It's not anti-capitalist to want more income growth for the bottom 90%. The very few people that have jumped from the bottom 5% to the top 10% would be considered outliers.

Posted by: ania8 | September 9, 2010 11:41 PM | Report abuse

Mobility between the income quintiles has stayed about the same or decreased. So despite any questions about the fate of individuals, this is an enormously damning result.

Posted by: Lee_A_Arnold | September 10, 2010 12:20 AM | Report abuse

Great website on this subject:

http://freedomkeys.com/gap.htm

"Never mind the low wages and harsh living conditions of the early years of capitalism. They were all that the national economies of the time could afford. Capitalism did not create poverty -- it inherited it. Compared to the centuries of precapitalist starvation, the living conditions of the poor in the early years of capitalism were the first chance the poor had ever had to survive. As proof -- the enormous growth of the European population during the nineteenth century, a growth of over 300 percent, as compared to the previous growth of something like 3 percent per century."-- Ayn Rand

Posted by: FastEddieO007 | September 10, 2010 8:25 AM | Report abuse

Which is worse?

USA, where we have 1% of the population has billionaire corporate country club types living in a different reality where they get every thing they want while everyone else has to toil......


OR Communist China where 0.01 % of the population is the powerful get-everything-they-want-types living in a different reality where they get every thing they want while everyone else has to toil......

Posted by: FastEddieO007 | September 10, 2010 8:28 AM | Report abuse

Would Bill Gates have managed to become part of the 0.01% powerful types had he been born in a system like China's.

Though our 1% is a problem, there is a meritorious path to becoming part of that 1% as opposed to th path to become part of China's 0.01% rulling elite.

As for those who say there has got to be something better than these choices of USA's 1% elitests and China's 0.01% elitests....weel the world has not seen it.

Europe's socialist model tends to reward old money far worse than the USA system, and is really just a half-way house between USA and China.

Posted by: FastEddieO007 | September 10, 2010 8:31 AM | Report abuse

Ezra again knows no shame. A leftie columnist quoting a left wing source but not identifying the source except in very small print,like his cohorts accuse banks of using, and a discreet link at the bottom of the chart. I would counter argue that this shows more the connection between the level of education and the level of income, but I expect Ezra would just like to go down the path of redistribution of income, WHICH DOES NOT WORK.

Posted by: jfgerald | September 10, 2010 8:38 AM | Report abuse

The only solution that lefties have for preventing a growing disparity between rich and poor is to inhibit prosperity.

That is precisely what we have seen from 2 years of Obama passing every single piece of legislation that has been desired by him, Pelosi, and all the lobbyists for Unions, Trial Lawyers, and Environmental Actvists.


How does that 9.8% Social Justice taste this morning America?

Posted by: FastEddieO007 | September 10, 2010 8:54 AM | Report abuse

The higher tax rates on the rich (and especially the increased rates on capital gains) serve not to redirect the wealth from the rich to the poor as Democrats and Ezra Klein would have you believe.....all it does is penalize risk-taking to the point of inhibiting it. And therefore inihibiting overall growth.

And Ezra Klein can't understand why businesses aren't hiring? Why Obama is perceived by 80% of America as being anti-business?


Wake up.

Posted by: FastEddieO007 | September 10, 2010 8:58 AM | Report abuse

Robert A. Heinlein said: "Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded -- here and there, now and then -- are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right thinking people. Whenever this tiny minority is kept from creating or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty."


Ezra is leading the charge here to attack the people responsible for bringing prosperity to our nation....as if attacking them will help the people who suffer in pverty....the truth is that they are the only way out. They are heros...only enemies to those who subscribe to Mao and Lenin's elitism.

Posted by: FastEddieO007 | September 10, 2010 9:02 AM | Report abuse

I did not realize how very young the writer of this blog is. I mean the following comment very sincerely: As a result of his strong initiative and enterprise, if the writer is not in top 10% already, he will arrive there very soon, and I congratulate him on that!

Posted by: jfgerald | September 10, 2010 9:04 AM | Report abuse

EZRA - IS YOUR RESEARCH DESK OPEN?

The Clintons and the Democrats enacted a higher tax rate on the rich in 1992.

Did it in any way slow down the rate at which the rich got richer than the poor?


PROVE ME WRONG!

Posted by: FastEddieO007 | September 10, 2010 9:05 AM | Report abuse

Way to pick and choose a graph to prove your liberal point - which is based upon Class Envy or perhaps more precisely, Income Envy.

Does your chart show how much of that wealth was inherited? How much was earned based upon a college degree - a bachelors, masters, or doctorate for example - because if you factor in education then you also have to factor in how many years of schooling it took and how much money it took to get to that income level now wouldn't you?

Does that chart show income earned by movie stars, rock stars, tv personalities and radio personalities broken down by group? And let's not forget the athletes. Any of these groups can earn a million an episode, 20 million a movie, 30 million on a CD, or several million during each sports season......

What you liberals want us all to forget (conveniently) is that those who make good money usually earn it through years of education, working their way up the ladder of success, through two incomes where both have been educated and worked that ladder, or through some means of marketing their particular talent.....

And there is nothing that stops anyone from pursuing the same road to success in this country - there are student grants, scholarships for the poor; student loans for the not so poor as well as though scholarships and grants...but it requires EFFORT to earn them....remember that word...EFFORT? Effort spent doing homework, studying, community service hours, developing a talent instead of partying all the time.....and expecting the government just to hand you all that success.

When we first married, we made about $10,000 per year between the two of us....we've worked hard to get to where today our total income is just below $60,000 - we've raised three kids, paid for two colleges with the help of grants, scholarships and loans for our oldest two children....we don't get any handouts from the government and we certainly don't whine about how someone else makes twice or three times more than we do....

When you convince (as you're attempting to do) the public that the government owes them and that they can vote in "largess" for themselves without hard work, then this country is doomed....

Posted by: LMW6 | September 10, 2010 1:10 PM | Report abuse

Apparently there are two major flaws in these definitions of the 'RICH'.

The income of S corporations is regarded as personal income; while it is really 'for the corporation' to cover expenses, new hires, and capital investments. There may be some other reporting anomalies as well. Many people operate one, two or more 'businesses' from their home and the income reported is really business income.

The value of the real estate holdings of wealthier classes has dropped 20 40+%. Real estate transactions which provide future income must reflect this fact; as well as the lag time in property and other taxes based on the old value of the property.

Sheltering income is a growth industry; so increasing taxes only hastens the use of off-shore and other shelters.

So even though you like to engage in class warfare on behalf of the near rich and other envious losers, at least be factual and fair.

Posted by: Common_Cents1 | September 10, 2010 1:13 PM | Report abuse

the AGI to be in the top 10% is on the order of $115,000. That is hardly 'rich' especially if you live in the DC metro area.

Ezra, you act as if it is a bad thing for people to succeed and grow their income, What do you have against success?

Posted by: katooom | September 10, 2010 2:10 PM | Report abuse

The Clintons and the Democrats enacted a higher tax rate on the rich in 1992.

Did it in any way slow down the rate at which the rich got richer than the poor?

We as a nation need to ask ourselves if we accept capitalism and its general nature that allows the rich to leverage their access to wealth to create more wealth which will forever allow them to become wealthier faster than those without wealth.

We could choose the Chinese, Russian, or European models where the majority of wealth creation is completely dominated by the politically powerful and there is generally much less of it to go around.

+++

So, then are you saying the SUPER WEALTHY here are NOT politically powerful??? Last I checked, I wasn't able to book an appointment with President Bush or President Obama...Can you?

Posted by: hiflyer767 | September 10, 2010 9:30 PM | Report abuse

@hiflyer767

Tis true that when a young go-getter like Bill Gates invents an incredible world-changing operating system and is keen enough to leverage it to accumulate an enormous amount of wealth, he does generally get a deccent lionshare of policy consideration....but there is always the underlying fundamental merit driving it.

Now compare that to China, where the bloodline of the politically powerful always seem to find themselves in the driverseat of every significant profit-accumulating enterprize.

What system do you choose?

What system has USA chosen for the last 250 years?

Posted by: FastEddieO007 | September 12, 2010 9:23 PM | Report abuse

@ania8 "Why aren't more people outraged by this disparity in income growth? It's not anti-capitalist to want more income growth for the bottom 90%. The very few people that have jumped from the bottom 5% to the top 10% would be considered outliers."

Here's probably your best explanation:

"David Brooks: Yes. I was going to say that for the first time in human history, rich people work longer hours than middle class or poor people. How do you construct a rich versus poor narrative when the rich are more industrious? "

http://opinionator.blogs.nytimes.com/2010/04/07/redefining-what-it-means-to-work-hard/

Posted by: jnc4p | September 12, 2010 11:01 PM | Report abuse

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