Saturday, October 22, 2011

OWS: Ignorant Villagers with Pitchforks

U of Chicago economist Steven Kaplan updates data on income skews.



If some of the OWS crowd would actually use that tuition they want from others to pay for economics courses, they would know that income disparity ALWAYS falls during periods of economic contraction or stagnation and rises during periods of high economic growth.
The reason should be pretty obvious (unless you don’t want it to be). It is the same reason that in years of favorable weather, the crop yield widens between those who farm rich land with pesticides and mechanization and those who farm poor land with hand tools.
Since the 1980s we have been in a long-term secular expansion driven by rapid technology innovation and (relatively) favorable policies toward investment. Those with high intellectual capital and high personal motivation have been able to increase their “crop yields” much faster than those who lack those attributes.
This is not a conspiracy hatched on Wall Street. It is a simple fact of economics. If you want the amenities that economic growth brings, you WILL have greater disparities in income. The Wall Street occupiers who seek greater equality of income are like villagers praying for years of bad weather so that the farmers will be more nearly equal.

See also http://econocentric.blogspot.com/2011/08/egalitarians-rejoice-in-recession.html

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