X-Envelope-to: POLITICS@OHSTVMA.ACS.OHIO-STATE.EDU
X-VMS-To: IN%"POLITICS@OHSTVMA.ACS.OHIO-STATE.EDU"
MIME-version: 1.0
Content-transfer-encoding: 7BIT
Newsgroups: bit.listserv.politics
Date:         Mon, 9 Nov 1992 02:04:57 -0400
From:         The Integral Differential <DEMON@DESIRE.WRIGHT.EDU>
Subject:      Re: Who gained what in the 1980s
Comments: To: POLITICS@OHSTVMA.ACS.OHIO-STATE.EDU

>Me:
>               Who gained what in the 1980s
>
>       Income          Gain
>       < $25k          19%
>       25-50k          39%
>       50-100k         25%
>       >100k           23%
>
>       Change in average net worth, 1983-1989, in real 1989 dollars.
>
>       (Forbes 400 issue, 10/19/92, page 78.)

<        I'm a bit confused about what these figures actually say.  Do these
<data claim that income grew by the indicated percentage for each quartile (and
<by the way, aren't such data usually divided by quintile?  Why did Forbes use

	Yes.  I believe it has something to do with the data coming from the
census bureau instead of the federal reserve.  But then again maybe Forbes was
trying to water down the top part :).

<this non-standard division?)?  If so, why is there no mention of change in
<total wealth?  By my recollection, this latter measure indicates a much more
<drastic concentration of wealth in the hands of the upper classes (I will have
<to find that data).  Or, do these data show changes in total wealth (net worth)
<by people in each income category?  Even if the latter, I still have some

	Yes, the latter.

<reservations about the numbers.  A 23% change in net worth for one whose income
<is >100k is much greater than a 19% gain for those with income less than 25k.

	Yes, but if everyone gained 25%, what could be fairer?  Doubling a
million gives you an additional million while doubling a penny gives you only
another penny.  But should everyone with a million donate $500k to those who
only have a penny?

<As a matter of fact, these figures do not refute the claim that, of total
<wealth in the economy, the 1980s saw a greater _concentration_ in the hands of
<the wealthiest Americans.

	It wasn't meant to, but merely to show that it was not a case of rich
got richer, poor got poorer.

<Lastly, why the dates of 1983-1989?  Wouldn't a more
<valid comparison be one made between a time _before_ Reagan took office and
<Reagan's term itself?  Why compare trends within the term?

	1983 is an inflection point for the US economy.  The previous
inflection point is 1972 and there will probably be one at 1990 also.
Measuring peak to peak and trough to trough are common economic yardsticks, but
trough to peak is more valid for measuring improvements rather than comparing
various economic eras.
	Basically because we want to measure gain from the lowest point in the
1980s, which came at the end of the 81-2 recession.  Now, if we simply wanted
to measure the difference between Reagan's start and Reagan's end, we'd use
1982-1989, but that would only change the figures a little.  Indeed, measuring
in 1982 (during the recession) might make some of the numbers look even
'better'.
	You'll see a lot of economic charts with 1983-1989 (or 1983-1990)
because of the notion of inflection points.

<        Please note that the History Czar staff welcomes disagreement and
<discourse, even within its own ranks.  We are simply ever-vigilant against the
<abuses of history.

	Just don't make me send over the Marines :).

Brett'
Comments: Gated by NETNEWS@AUVM.AMERICAN.EDU