Top 1 Percent of Americans Reaped Two-Thirds of Income Gains

[Rajiv]

Top 1 Percent of Americans Reaped Two-Thirds of Income Gains in Last Economic Expansion

Income Concentration in 2007 Was at Highest Level Since 1928, New Analysis Shows

Two-thirds of the nation’s total income gains from 2002 to 2007 flowed to the top 1 percent of U.S. households, and that top 1 percent held a larger share of income in 2007 than at any time since 1928, according to an analysis of newly released IRS data by economists Thomas Piketty and Emmanuel Saez.[1]

During those years, the Piketty-Saez data also show, the inflation-adjusted income of the top 1 percent of households grew more than ten times faster than the income of the bottom 90 percent of households.

The last economic expansion began in November 2001 and ended in December 2007, according to the National Bureau of Economic Research, which means the Piketty-Saez data essentially cover that expansion. The last time such a large share of the income gain during an expansion went to the top 1 percent of households — and such a small share went to the bottom 90 percent of households —was in the 1920s (see Figure 1). [2]



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Excellent update to iTulip's 2006 analysis of distribution of income gains pre- and post-FIRE Economy that resulted in this:

[MulaMan]

Re: Top 1 Percent of Americans Reaped Two-Thirds of Income Gains

Reagan revolution baby 1981 - 1989

Those 40s,50s,60s days when a blue collar guy could support a family of 6 with the wife at home - Reagan stopped that socialist, peace and love, hippie, rich middle class, driving big ass cars, white picket fence crap in a big way

but we needed to sell out the farm to git those commies and make the bankers rich

and fools are still failing in line.

we no longer have Reagan but we have Fox News.

[Serge_Tomiko]

Re: Top 1 Percent of Americans Reaped Two-Thirds of Income Gains

Reagan revolution baby 1981 - 1989

Those 40s,50s,60s days when a blue collar guy could support a family of 6 with the wife at home - Reagan stopped that socialist, peace and love, hippie, rich middle class, driving big ass cars, white picket fence crap in a big way

but we needed to sell out the farm to git those commies and make the bankers rich

and fools are still failing in line.

we no longer have Reagan but we have Fox News.

Where do these nutjob liberals come from?

[unlucky]

Re: Top 1 Percent of Americans Reaped Two-Thirds of Income Gains

Income Concentration in 2007 Was at Highest Level Since 1928, New Analysis Shows

Sounds like income inequality could be a good predictor of market and economic meltdown, no?

[Thailandnotes]

Re: Top 1 Percent of Americans Reaped Two-Thirds of Income Gains

http://www.youtube.com/watch?v=VIMi7fBA6e4

[Rajiv]

Re: Top 1 Percent of Americans Reaped Two-Thirds of Income Gains

The FIRE economy can in fact be directly traced to policies adopted in the Reagan Administration, and continued through subsequent Administrations (Republican or Democrat)

See Palley's article embedded below.

Palley50

[Serge_Tomiko]

Re: Top 1 Percent of Americans Reaped Two-Thirds of Income Gains

The FIRE economy can in fact be directly traced to policies adopted in the Reagan Administration, and continued through subsequent Administrations (Republican or Democrat)

This country is not a dictatorship. Democrats controlled Congress in whole or in part for most of the 20th century, and certainly when Reagan was president. Your article, while interesting, does not contradict this fact.

At the same time, blaming Reagan - or any specific political ideology - is ignorant of the era the parent poster exalted.

The 1940s, in particular, were an era of austerity for practically everyone. Would the 1950s blue collar special have been so fantastic if we had not firebombed most of the competitive industry that existed in the world at the time? And what of the destruction of competitive lending centers, the rise of the military-industrial complex, even the oil boom years... the prosperity of the early post-war era was always based on the victory of the Allied powers during World War II and the fact the US suffered no serious military losses in manpower or wealth.

The problem with liberals is they are far too moralistic and it hurts their cause. I mean, blaming Reagan today? With all the problems we face? It's rather ridiculous.

[WDCRob]

Re: Top 1 Percent of Americans Reaped Two-Thirds of Income Gains

Serge, since you apparently have a strong opinion abou this...

Why do you think that where income gains were previously distributed quite evenly (as a percentage) across all income groups from 1947-1979, they have been increasinly captured to the wealthiest quintile since 1980?

If it's not the policies put in place by Reagan and continued for the past 30 years, what do you point to?

[Rajiv]

Re: Top 1 Percent of Americans Reaped Two-Thirds of Income Gains

The problem with liberals is they are far too moralistic and it hurts their cause. I mean, blaming Reagan today? With all the problems we face? It's rather ridiculous.

Human beings are not any different -- whether right wing or left wing. Everybody thinks that their world view is the right one, and the the one opposed to their thinking is incorrect -- once that feeling comes in, then people start to resort to pejoratives. It is much simpler to ridicule than to engage in a substantive discussion when world views differ significantly.

[vinoveri]

Re: Top 1 Percent of Americans Reaped Two-Thirds of Income Gains

Serge, since you apparently have a strong opinion abou this...

Why do you think that where income gains were previously distributed quite evenly (as a percentage) across all income groups from 1947-1979, they have been increasinly captured to the wealthiest quintile since 1980?

If it's not the policies put in place by Reagan and continued for the past 30 years, what do you point to?

Reagan is an easy target; he's dead
Not that I'm a fan of "supply side" econ (I can still remember the TIME cover with David Stockman holding a copy of the U.S. budget), but to blame Reagan is a bit much.

Look in the mirror. We get the gov we deserve.

[vinoveri]

Re: Top 1 Percent of Americans Reaped Two-Thirds of Income Gains

Human beings are not any different -- whether right wing or left wing. Everybody thinks that their world view is the right one, and the the one opposed to their thinking is incorrect -- once that feeling comes in, then people start to resort to pejoratives. It is much simpler to ridicule than to engage in a substantive discussion when world views differ significantly.

the real problem IMO is that people simply don't think, not really, they emote, because thinking is too hard, and for those who do try to think, they routinely turn tail and give up when either it gets too hard or forces them to challenge their own preconceptions.

Hardly anyone will think and discuss from first principles (other than of course, "that's what I think/feel" OR "that expert says so")

[WDCRob]

Re: Top 1 Percent of Americans Reaped Two-Thirds of Income Gains

Look in the mirror. We get the gov we deserve.

You agree that this is the result of policy then?

[grapejelly]

Re: Top 1 Percent of Americans Reaped Two-Thirds of Income Gains

Serge, since you apparently have a strong opinion abou this...

Why do you think that where income gains were previously distributed quite evenly (as a percentage) across all income groups from 1947-1979, they have been increasinly captured to the wealthiest quintile since 1980?

If it's not the policies put in place by Reagan and continued for the past 30 years, what do you point to?

it's the FIRE economy. An unprecedented expansion of fiat money starting in 1981 or so and ending in 2007. Anyone benefiting from it made out like a bandit. Those not in it ended off flat or worse off financially.

[vinoveri]

Re: Top 1 Percent of Americans Reaped Two-Thirds of Income Gains

You agree that this is the result of policy then?

I agree that FIRE was enabled and in many ways supported by various government policies, including those under Reagan.

When I look at these graph, I can't help but think the seeds were sown and the die was being cast when gold was finally abandoned as an anchor to currency (~1971).

[don]

Re: Top 1 Percent of Americans Reaped Two-Thirds of Income Gains

An ahistorical approach leads to a partisan dead end.