[Disclaimer: this is a derail/branch from the Gaming Obamacare thread and also in part a response to a PM convo with medic2038. i know, it won't make much sense.]
so i watched The Flaw last night. enjoyed the presentation, but did not enjoy so much the Louis Hyman segments when he starts playing "economic historian." i think he really ruined what was for the most part a very accurate, moving documentary with his unsubstantiated claims. that's my major point of contention, so i'll just stick to that for now.
his major thesis is that the recent rise of income inequality in the US was the cause of our current failure of capitalism and the impending doom of the middle class.
but who cares about % of income? absolute income and the health of the overall economy is more important. but i'll get to this later.
Hyman says income has stagnated since the early 1970's to today. and his implication is that income inequality is to blame. but the data doesn't support his conclusion.
in the movie, the chart @ 48:52 "Share of income bottom 90%" shows that from 1970-1980, the bottom's share of income was 65% or greater--near all-time highs. the same decade when income was stagnating. so unless there is a 10 year lag between income inequality and income stagnation, there is no causation.
i think the concept of ever-increasing wages is a myth. if this was true, a thousand years from now, the median income (in inflation adjusted dollars) of the nation would be so high that everybody is super rich. when examined thusly, the concept that wages must rise over time is obviously as absurd as the idea that housing prices must rise over time (a myth which Yale economist Robert Shiller debunked and which was also presented in the movie).
so let's reconsider. the evidence shows a different picture. we're getting richer as a nation , every one of us, rich and poor alike.
Harder for Americans to Rise From Lower Rungs ? [question is mine]
But many researchers have reached a conclusion that turns conventional wisdom on its head: Americans enjoy less economic mobility than their peers in Canada and much of Western Europe.
Skeptics caution that the studies measure “relative mobility” — how likely children are to move from their parents’ place in the income distribution. That is different from asking whether they have more money. Most Americans have higher incomes than their parents because the country has grown richer.
Some conservatives say this measure, called absolute mobility, is a better gauge of opportunity. A Pew study found that 81 percent of Americans have higher incomes than their parents (after accounting for family size). There is no comparable data on other countries.
The income compression in rival countries may also make them seem more mobile. Reihan Salam, a writer for The Daily and National Review Online, has calculated that a Danish family can move from the 10th percentile to the 90th percentile with $45,000 of additional earnings, while an American family would need an additional $93,000.
and we have to get a sense of bearing in all this doom and gloom. even with the US's "bad" income inequality and stagnant wages, we're forgetting that we are the 1% in the global economic picture.
and all this even when our manufacturing industry has supposedly died and gone overseas. but contrary to popular opinion, again, this is not true.
and if the loss of manufacturing jobs due to the evil, heartless machines is now bothering you, do not fret, i'll again refer you back to Hazlitt - CHAPTER 7 The Curse of Machinery (skip to page 33).
but i did enjoy the movie, for the most part.