I spoke the other day how our government lies to us.   And, continues to do so.  (That is true for the Executive and Legislative Branches.  Although the legislative branch is working very hard to win the battle on lying and obfuscation.)

But, it’s also true of columnists.  The ones that want us to believe what they have to say.   (And, way too many of these barely competents are being hired as talking heads on TV.  Tell me again what qualifies Corey Lewandowski as a commentator?   Or Rick Tyler?   (If you don’t know who they are, they were staff heads for Trump and Cruz, respectively- neither of whom expounded one bit of policy sense.)

And, just the other day, I was appalled as to how one columnist (Robert Samuelson) was playing fast and loose with the facts.  He spouted the conventional wisdom- that the richest 1% have managed to usurp the income gains of the past decades.

But, then he tried to claim that the upper middle class has doubled in size.   Which is, in and of itself, an interesting concept.  Because the definition of the “middle class” is the middle 20% of income earners in the US.  Or, alternatively, it encompasses the folks that are not in the top 20% of income earners or the bottom 20% of the income earners.

Obviously, if your income grows enough that you are in the top 20% of the earners in the US, you are NOT in the middle class. You are not in the top 1% or 5%, but certainly not middle class.

Which explains one of the reasons why the study performed by Stephen Rose (Urban Institute) is hogwash.  Because he chose income levels that do not match the income strata in the US.  Instead, he confused the strata to include income from both of the top two income levels.  And, in so doing, he could prove that these folks were able to move from the top 12.9% of Americans in 1979 to the top 29.4%  by 2014.  (Notice that the first strata were clearly NEVER in the middle class- unless you deliberately create a “straw man” with which you can win an argument.)

What Rose clearly did was not reflect the proper value of money over the past 25 years.  Moreover, he used family income.   Which is the biggest way to obfuscate results.

Back in the dark ages, before the decimation of the middle class, a family typically had ONE wage earner.  Now that the middle class has been suppressed, it is atypical for a household to have less than two wage earners.   (Many of these households also have teenagers making money- but while the kids use it for their own needs,  that still alleviates some of the demand on the family coffers.)

And, as I had found when I was being surprised with a young child when I was a much older gent, our family employed a nanny.  That nanny may have been an extravagance for many (with both of us parents serving as corporate executives, with four other children in the house, it clearly wasn’t one to us), but that same sort of expense (albeit perhaps lower) exists for many two-income families.

I recall my daughter’s complaint when she found that nursery schools for 2 year olds had tuitions of $ 15K- minimum.  (When my two oldest were little, our child day care expenses exceeded $ 10K and that was way back in the early 1980’s.)  That sort of expense evaporates much of the family income.  (Many of my friends- and my childrens’ friends- are now having one person provide child care, since the disposable income after child care is not much changed with or without the second income earner.)

Those expenses also change the value of the family income.  Even if you are in the top 10% of income earners- on the order of $ 190K for a family- removing that child care expense drops your true income by almost 10%- and that’s before taxes.

And, the data (John Komlos) has proven that the richest 1% have income growth of almost 4% a year.  That’s pretty steep compared to the 1% growth for the rest of the population!

And, then, we have those graphs that seem to depict the same situation.  Here’s one from the Washington Post.  (It was produced by Branko Milanovic of the Luxembourg Income Study and the World Bank.)  If you took a casual look at this graph, you would think that most of us have had decent income growth from 1988 to 2008.  But, that graph is for the workers of the world.  And, most of the world’s workers can be found in the bottom 75^th percentile of income.

As a matter of fact, the median income for the residents of the former Soviet Union and Soviet empire are at the 75^th percentile.  Europe and US comprise the 87^th percentile, with Asia around 40^th, Africa about 46th, and Latin America at the 60^th.

So, you can see that the US (and world) middle class has been suffering at the expense of the richest in the world.  (And, the bottom echelons of the income may look like they’ve gained plenty, but a 75% gain in income when your income is $1K , $ 5K, or 10K still leaves you far behind.

So, yes, the developed world’s workers and professionals have had their income stymied to benefit the rich.

Oh, and those corporations that complain there are few productivity gains in the US and Europe?   Perhaps someone can remind them that when no investment is made in automation or process improvements (since capital investment is less than flat for most business segments), expecting gains in productivity means you really must believe in fairy dust.

Then, again, Mary Poppins was a hit with those chimney sweeps.

 

 

This blog title was one of the two signs I had on my wall, since I was around 7.  (The other was from Voltaire’s Candide:  May you live as long as you want to- and want to as long as you live.)  My parent’s kept taking them down.  I kept making new ones and putting them back up.

In case you don’t know- the title means:  Avoid Confusion!