That Top 0.1% Problem

For John, BLUF:  It isn't the top 1%, it is the top 0.1%.  Nothing to see here; just move along.

---

The question of wealth inequality is out there, from the Occupy Wall Street Movement to French economists.  Because it is catchy and easy to grasp the expression "Top 1%" is used to capture the issue.  Truth being the first victim, so here we have the real number being the Top 0.1% of people representing this yawning gap in wealth.  And this morning from the Quartz site we have this:

Thomas Piketty’s Capital in the Twenty-First Century went on sale in the US this week, and its central message can seem like a prophecy of doom.  It is that capital tends to accumulate faster than the economy grows in the long run; wealth thus concentrates in the hands of a few; and the egalitarian, upwardly mobile America of the mid-20th century was more a historical aberration than the natural order of things.  Through their research into income inequality, Piketty and his colleague Emmanuel Saez provided the “1% vs the 99%” narrative that drove the Occupy Movement.

But what’s often missed, as Quartz’s Tim Fernholz found out when he talked to Piketty, is that the 42-year-old French economist is actually rather optimistic.  To those who say that a global wealth tax, his proposed solution to inequality, is something that Americans would never accept, he retorts that nobody in 1910 thought the US would ever have income taxes, or more recently, that Swiss bank secrecy could ever be broken.  A wealth tax, he suggests, could replace a tax on property, making it popular with middle-class homeowners and giving politicians a lever to push it through.

But whether Piketty’s optimism is misplaced, or even whether he is right, matters less than the fact that, by framing the problem in these clear terms, he has enabled a public debate.  “Piketty has transformed our economic discourse; we’ll never talk about wealth and inequality the same way we used to,” wrote Paul Krugman, who knows a thing or two himself about changing economic discourse.  Another legendary economist, Paul Samuelson, once said, “I don’t care who writes a nation’s laws, or crafts its treatises, if I can write its economics textbooks.”  If Piketty’s work influences the terms in which politicians fight their battles, he too may end up having more influence than many of them.—Gideon Lichfield

OK, I don't have a lot of respect for Nobel Laureate Paul Krugman, who, per Gawker, just took a $225,000 pa job teaching one course a semesteryear, beginning year two.  I wonder what all the underpaid Adjunct Professors think of that?

Here is a Quartz ten question interview with Author Thomas Piketty.

I am not so sure I can get all the worked up about the super-rich.  My focus is on those who just scraping by, and how we can improve their lot, and on those who have fallen into some sort of poverty trap, where their moral outlook is one of living off the work of others, and how we can help them develop a sense of responsibility for themselves and for others.  Those are two different points and people fall all along a spectrum from one point to the other.

Regards  —  Cliff