Posts filed under “Wages & Income”
Perhaps I painted with too broad a brush when I described this as an American pastime; to be more accurate, it is a hobby of the moneyed classes in general and on Wall Street in particular. My apologies to the rest of America, onto whom I unfairly projected this unseemly preoccupation.
Still, endeavoring to understand how the current circumstances evolved is a worthwhile undertaking. Wealth, public policy and economic inequality developed along two very different paths in Europe and the U.S. That is where we begin our discussion this morning.
I’m going to overly generalize and exaggerate a bit here to make a point about how society evolved in the U.S. and on the Continent. Modern Europe had a 1,000-year head start on America. By the time the first European explorers were taking tentative steps on the shores here, Europe had become a well-developed feudal society. If you want to consider extreme levels of income inequality, consider the distribution curve of property ownership in that system.
Typically, the feudal lord or king owned, well, everything. Serfs were allowed to work the land, and most of the bounty went to the crown. They could hunt in the royal fields and forests, providing the appropriate tax was paid. The king provided some sort of justice as well as protection from marauding hordes. In exchange for these royal gifts, one only had to promise undying fealty, a willingness to be conscripted into the military for both needed defense and the occasional foreign involvement, or anything else at His Majesty’s or His Lordship’s discretion. Let’s not even discuss the right of primae noctis.
How much compensation the folks at Pacific Investment Management Co., better known as Pimco, haul in each year has always been a topic of fascination on Wall Street. In 2012, news reports suggested that the firm’s top 30 partners “pulled down an average $33 million a year in compensation in recent years.” A subsequent column…Read More
You all the know urban legend of the conversation between F. Scott Fitzgerald and Ernest Hemingway. Fitzgerald: “Let me tell you about the very rich. They are different from you and me.” Hemingway: “Yes, they have more money.” It never happened, but it points to an interesting question: Why are we in America so fascinated with…Read More
It looks as if you can buy happiness, after all. At least, in limited amounts, and up to a point. That seems to be the conclusion based on a recent survey by the Pew Research Center, part of the Pew Charitable Trust. Pew notes that Israel, the U.S., Germany and the U.K. have the happiest…Read More
Economic Commentary Income Inequality and Income-Class Consumption Patterns LaVaughn M. Henry Federal Reserve Bank of Cleveland, 10.06.2014 As income inequality has increased in the United States, researchers have rightfully asked whether it has also led to inequality in relative consumption. This is an important question because consumption is clearly a better measure of an…Read More
Source: MoJo Last time we looked at this subject, we noted that There’s Rich, Then There’s the 0.01%. Since then, the disparity between rich and poor, as well as the rich and the really rich have widened further. As the chart above shows, the gap between the bottom 90% (in pink) and the…Read More