Little Red Tricycle

The Maldives are definitely on the list for the Grand Tour 2006. Stay tuned!

Damn that New York Times firewall. I miss my Krugman fix, and wish I could check out Sarah Vowell's writing, but I just can't bring myself to fork over the $$ to get around the TimesSelect tollbooth.

Thankfully, the good stuff trickles through. This time, thanks to Brad DeLong:

Graduates Versus Oligarchs

Why is America becoming a land of oligarchs and the insecure? Paul Krugman writes:

Graduates Versus Oligarchs - New York Times: What we're seeing isn't the rise of a fairly broad class of knowledge workers. Instead, we're seeing the rise of a narrow oligarchy: income and wealth are becoming increasingly concentrated in the hands of a small, privileged elite. I think of Mr. Bernanke's position, which one hears all the time, as the 80-20 fallacy. It's the notion that the winners in our increasingly unequal society are a fairly large group -- that the 20 percent or so of American workers who have the skills to take advantage of new technology and globalization are pulling away from the 80 percent who don't have these skills.

The truth is quite different. Highly educated workers have done better than those with less education, but a college degree has hardly been a ticket to big income gains. The 2006 Economic Report of the President tells us that the real earnings of college graduates actually fell more than 5 percent between 2000 and 2004. Over the longer stretch from 1975 to 2004 the average earnings of college graduates rose, but by less than 1 percent per year.

So who are the winners from rising inequality? It's not the top 20 percent, or even the top 10 percent. The big gains have gone to a much smaller, much richer group than that. A new research paper by Ian Dew-Becker and Robert Gordon of Northwestern University, "Where Did the Productivity Growth Go?," gives the details. Between 1972 and 2001 the wage and salary income of Americans at the 90th percentile of the income distribution rose only 34 percent, or about 1 percent per year. So being in the top 10 percent of the income distribution, like being a college graduate, wasn't a ticket to big income gains. But income at the 99th percentile rose 87 percent; income at the 99.9th percentile rose 181 percent; and income at the 99.99th percentile rose 497 percent. No, that's not a misprint.

Just to give you a sense of who we're talking about: the nonpartisan Tax Policy Center estimates that this year the 99th percentile will correspond to an income of $402,306, and the 99.9th percentile to an income of $1,672,726. The center doesn't give a number for the 99.99th percentile, but it's probably well over $6 million a year.... The idea that we have a rising oligarchy is much more disturbing. It suggests that the growth of inequality may have as much to do with power relations as it does with market forces. Unfortunately, that's the real story. Should we be worried about the increasingly oligarchic nature of American society? Yes, and not just because a rising economic tide has failed to lift most boats. Both history and modern experience tell us that highly unequal societies also tend to be highly corrupt. There's an arrow of causation that runs from diverging income trends to Jack Abramoff and the K Street project. And I'm with Alan Greenspan, who... has repeatedly warned that growing inequality poses a threat to "democratic society."

Say, rather, that five things are going on:

1. The rise of a very powerful, successful, exploitative upper class.
2. Further increases in inequality as the tax and transfer system becomes less progressive.
3. Increases in risk that threaten to move middle-class families sharply downward in the wealth distribution.
4. Skill-biased technical change that sharply raises the benefits to education.
5. Holes in the safety net--the fall in the value of the minimum wage, time-limited welfare, and so forth.

Both history and modern experience tell us that highly unequal societies also tend to be highly corrupt.

Gee, ya think?

Duty, according to George W. Bush and George Bernard Shaw

See, we have a duty. The job of the President is to confront problems, not to pass them on to future Presidents and future generations. –GWB

I have a duty to nominate well-qualified men and women to the federal judiciary. I have done just that, and I will continue to do so. –GWB

We have a duty for future generations. We have a duty to leave this world more peaceful. We have a duty to reform the institutions that are old and tired. That's our duty. –GWB

I have a duty as the president to define problems facing our nation and to call upon people to act. –GWB

I have a duty to protect the Executive Branch from legislative encroachment. I mean, for example, when the GAO demands documents from us, we're not going to give them to them. –GWB

When a stupid man is doing something he is ashamed of, he always declares that it is his duty. –George Bernard Shaw (1856-1950)

via mtanga.com

Indeed.

This is one of my current favorite doggie photos from Flickr. Found via Johnny Huh, aka fenriq.

As caitlinb said, "Flickr is eating my brain."

create your own visited country map

The countries I've visited, updated. Watch for more red to be added during the summer of 2006...

What happens to the bad monkeys.