Quotations of the day on equality of outcomes.... - AEI

Too much wisdom and logic for some, but maybe in small doses......Sowell and Friedman are a dynamite combination.

from AEI.org
http://www.aei.org/publication/quotations-of-the-day-on-equality-of-outcomes/

Posted: 26 May 2018 07:20 AM PDT AEI Quotations of the day on equality of outcomes…. …. are from Thomas Sowell: 1. If you cannot achieve equality of performance among people born to the same parents and raised under the same roof, how realistic is it to expect to achieve it across broader and deeper social divisions? …… 2. If there is not equality of outcomes among people born to the same parents and raised under the same roof, why should equality of outcomes be expected—or assumed—when conditions are not nearly so comparable? Quotations of the day on equality of outcomes…. Mark Perry

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STLFED: WEALTH INEQUALITY MAY BE A BIGGER PROBLEM IN THE US THAN INCOME INEQUALITY

  

But, on the other hand, not all Wealth Inequality is bad. You gotta love those two-handed economists and politicians. 

During the Clinton era, the President himself defended the burgeoning wealth and income inequality that was developing during the dot.com bubble. This according to no less an authority than Allan Greenspan in his book "The Age of Turbulence". Clinton's rationale is that this is what one would expect and was a welcome development during a period of economic growth. 

Hmmm..............

I'm pretty sure that the good folks at the Federal Reserve know of Hayek, they just don't believe Hayek. And why would they? He just makes too much common sense for them.

Mandating equal outcomes leads to unfair treatment

MARCH 03, 2015 by LEVAN GVALIA

From the fact that people are very different it follows that, if we treat them equally, the result must be inequality in their actual position, and that the only way to place them in an equal position would be to treat them differently....
We do not object to equality as such.... Our objection is against all attempts to impress upon society a deliberately chosen pattern of distribution, whether it be an order of equality or of inequality.

- FA Hayek, The Constitution of Liberty

Wealth Inequality May Be a Bigger Problem in the U.S. Than Income Inequality - St. Louis Fed On the Economy

		Wealth Inequality May Be a Bigger Problem in the U.S. Than Income Inequality - St. Louis Fed On t... ©Thinkstock/nidwlw
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07/29/14
Wealth Inequality May Be a Bigger Problem in the U.S. Than Income Inequality
U.S. income inequality has been a focal point of PUBLIC discussion and debate in recent years, with claims that it is severe and that the distribution is becoming increasingly unequal over time. However, wealth inequality is a much greater dilemma, according to a recent article from The Regional Economist, published by the Federal Reserve Bank of St. Louis.Income InequalityRESEARCH Director and Economist Christopher Waller and Senior Research Associate Lowell Ricketts, both with the St. Louis Fed, noted that, "Households in the top 10 percent of the income distribution have earnings so great that they raise mean income over the median for the entire population." In 2010, the median household income was about $46,000, while the mean income was close to $78,500. They also noted that some inequality in the U.S. income distribution naturally develops between age groups and that a lot of it is determined by educational attainment.Waller and Ricketts used a simple measure to see how income inequality in the U.S. compared to other countries around the world (which will be discussed on this blog Thursday) and how it compared to wealth inequality in the U.S. They used the ratio of the median income of the top 10 percent of the income distribution ($203,900) divided by the median income of the bottom 10 percent ($9,900). "The resulting ratio of 21 quantifies the substantial divide between the rich and the poor in the U.S."

Wealth InequalityWaller and Ricketts then examined U.S. wealth inequality in terms of net worth, defined as household assets less liabilities.1 In 2010, the median net worth of all households was $77,300. "Just as there was with the income statistics, there is a substantial divide between median and mean net worth. Mean net worth was $499,000, indicative of an even more top-heavy distribution than that of income."
Using income distribution, Waller and Ricketts calculated the same ratio as used above. The median net worth of the top 10 percent of the income distribution ($1.194 million) divided by the median net worth of the bottom 10 percent ($3,100) yields a wealth inequality ratio of 385, notably higher than the ratio of 21 for income inequality.
Using net worth distribution to define the population groups changes the statistics even more dramatically, as the bottom 20 percent of the distribution has a negative median net worth. The ratio of the median for the top 10 percent ($1.9 million) divided by the median for the bottom 30 percent ($700) yields a ratio of 2,714.

Not All Wealth Inequality Is BadWaller and Ricketts explained that some wealth inequality is a function of age, allowing people to maintain a stable path of consumption over their life spans. Young people have little wealth and tend to be unskilled, so they borrow money for school and their first home. In middle age, they start paying down their DEBTand accumulating wealth while entering their peak earning years. As they get older, they start spending down the wealth they accumulated. Waller and Ricketts said, "This natural life cycle of wealth accumulation hasn't changed much, and most Americans will progress along a similar path. While the process is the same for most people, at any one point in time you're going to have relative inequality: poor, middle and rich based on age alone. While this natural inequality doesn't account for the entire wealth disparity across the population, it is important to understand that some inequality isn't inherently bad." Waller and Ricketts concluded, "The labor market has changed into a system that places a greater value on EDUCATION than physical labor and rewards skilled workers with wage premiums. This system is characterized by substantial inequality, but it doesn't inherently exclude anyone from climbing the income brackets. … Wealth inequality is a much greater dilemma, but it is often unaddressed in the public debate outside of tax proposals. … Financial education initiatives could use some of the energy devoted to the fierce debate surrounding income inequality in the U.S."

Notes and References1 Household assets include both financial (such as retirement accounts, STOCKS AND BONDS) and nonfinancial (such as cars, homes and small businesses).
Additional Resources

• Regional Economist: U.S. Income Inequality May Be High, but It Is Lower Than World Income Inequality

• From the President: Income Inequality and Monetary Policy: A Framework with Answers to Three Questions

• On the Economy: Increasing House Values Playing Significant Role in Wealth Recovery - St. Louis Fed On the Economy

from fee.org

http://fee.org/blog/detail/economic-equality-and-social-injustice-video

Economic Equality and Social Injustice (Video)

Mandating equal outcomes leads to unfair treatment

MARCH 03, 2015 by LEVAN GVALIA

From the fact that people are very different it follows that, if we treat them equally, the result must be inequality in their actual position, and that the only way to place them in an equal position would be to treat them differently....
We do not object to equality as such.... Our objection is against all attempts to impress upon society a deliberately chosen pattern of distribution, whether it be an order of equality or of inequality.

- FA Hayek, The Constitution of Liberty

https://www.youtube.com/watch?v=jceN4BYsxKc

Income Inequality...Cured. Get (and stay) educated, Get (and stay) employed, Get (and stay) married

Three important "Get and Stays" and a lot of this country's problems would disappear. 

PROBLEM SOLVED. YOUR WELCOME!!! 

It even makes Bloomberg embrace conservative values. It must be that obvious. 

Marriage and Income Inequality

			Marriage and Income Inequality Whom you marry can affect income inequality in the U.S.
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The U.S. compares very poorly to most other Western industrialized nations:

Washington may pay lip service to reducing inequality. But – as we will show below – bad government policy is largely responsible.

The Hard Facts of Inequality

A who's-who's of prominent economists in government and academia have all said that runaway inequality can cause financial crises.

Extreme inequality helped cause the Great Depression, the current financial crisis … and the fall of the Roman Empire.

But inequality in America today is actually twice as bad as in ancient Rome , worse than it was in inTsarist Russia, Gilded Age America, modern Egypt, Tunisia or Yemen, many banana republics in Latin America, and worse than experienced by slaves in 1774 colonial America.

from Carpe Diem:

Explaining income inequality by household demographics

			Explaining income inequality by household demographics This week, President Obama called America's "dangerous and growing" income inequality the "defining challenge of our time," and he plans to put the issue ...
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Explaining income inequality by household demographics Posted: 06 Dec 2013 09:03 AM PST This week, President Obama called America's "dangerous and growing" income inequality the "defining challenge of our time,"and he plans to put the issue of income inequality at the center of his agenda during the remainder of his second term. The president is not alone in his concern about income inequality – there's been a lot of discussion in recent years on the issue, especially concerns about "increasing income inequality." That concern is demonstrated by more than 1 million search results for the term "increasing income inequality" on Google. However, there's apparently not as much attention or concern about "explaining income inequality" (there are only178,000 Google search results for that term), and that's the topic that this post will attempt to address. Most of the discussion on income inequality focuses on the relative differences over time between low-income and high-income American households, but it's also instructive to analyze the demographic differences among income groups at a given point in time to answer the question: How are high-income households different from low-income households? The chart above (click to enlarge) shows some key demographic characteristics of U.S. households by income quintiles for 2012, using updated data from the Census Bureau (here, here and here, and see my previous versions of this analysis for years 2009 and 2010 and 2011). Below is a summary of some of the key demographic differences between American households in different income quintiles in 2012: 1. Mean number of earners per household. On average, there are significantly more income earners per household in the top income quintile households (2.04) than earners per household in the lowest-income households (0.45). It can also be seen that the average number of earners increases for each higher income quintile, demonstrating that one of the main factors in explaining differences in income among U.S. households is the number of earners per household. Also, the unadjusted ratio of average income for the highest to lowest quintile of 15.8 times ($181,905 to $11.490), falls to a ratio of only 3.5 times when comparing "income per earner" of the two quintiles: $89,169 for the top fifth to $25,533 for the bottom fifth. 2. Share of households with no earners. Sixty-one percent of U.S. households in the bottom fifth of Americans by income had no earners for the entire year in 2012. In contrast, only 3% of the households in the top fifth had no earners in 2012, providing more evidence of the strong relationship between household income and income earners per household. 3. Marital status of householders. Married-couple households represent a much greater share of the top income quintile (77.5%) than for the bottom income quintile (17%), and single-parent or single households represented a much greater share of the bottom 20% of households (83.0%) than for the top 20% (22.5%). Like for the average number of earners per household, the share of married-couple households also increases for each higher income quintile. 4. Age of householders. Almost 8 out of every 10 households (79.5%) in the top income quintile included individuals in their prime earning years between the ages of 35-64, compared to fewer than half (47.3%) of household members in the bottom fifth who were in that prime earning age group last year. The share of householders in the prime earning age group of 35-64 year olds increases with each higher income quintile. Compared to members of the top income quintile of households by income, household members in the bottom income quintile were 1.6 times more likely (23.5% vs. 14.8%) to be in the youngest age group (under 35 years), and more than 5 times more likely (29.2% vs. 5.7%) to be in the oldest age group (65 years and over). 6. Work status of householders. More than four times as many top quintile households included at least one adult who was working full-time in 2012 (78.2%) compared to the bottom income quintile (only 18.2%), and more than five times as many households in the bottom quintile included adults who did not work at all (67.3%) compared to top quintile households whose family members did not work (12.5%). The share of householders working full-time increases at each higher income quintile. 7. Education of householders. Family members of households in the top fifth by income were six times more likely to have a college degree (77.2%) than members of households in the bottom income quintile (only 12.9%). In contrast, householders in the lowest income quintile were 26 times more likely than those in the top income quintile to have less than a high school degree in 2012 (26.7 % vs. 1.0%). As expected, the Census data show that there is a significantly positive relationship between education and income. Bottom Line: Household demographics, including the average number of earners per household and the marital status, age, and education of householders are all very highly correlated with household income. Specifically, high-income households have a greater average number of income-earners than households in lower-income quintiles, and individuals in high income households are far more likely than individuals in low-income households to be well-educated, married, working full-time, and in their prime earning years. In contrast, individuals in lower-income households are far more likely than their counterparts in higher-income households to be less-educated, working part-time, either very young (under 35 years) or very old (over 65 years), and living in single-parent households. The good news is that the key demographic factors that explain differences in household income are not fixed over our lifetimes and are largely under our control (e.g. staying in school, getting and staying married,etc.), which means that individuals and households are not destined to remain in a single income quintile forever. Fortunately, studies that track people over time indicate that individuals and households move up and down the income quintiles over their lifetimes, as the key demographic variables highlighted above change, see CD posts here, here andhere. And Thomas Sowell pointed out earlier this year in his column "Income Mobility" that: Most working Americans who were initially in the bottom 20% of income-earners, rise out of that bottom 20%. More of them end up in the top 20% than remain in the bottom 20%. People who were initially in the bottom 20% in income have had the highest rate of increase in their incomes, while those who were initially in the top 20% have had the lowest. This is the direct opposite of the pattern found when following income brackets over time, rather than following individual people. It's highly likely that most of today's high-income, college-educated, married individuals who are now in their peak earning years were in a lower-income quintile in their prior, single younger years, before they acquired education and job experience. It's also likely that individuals in today's top income quintiles will move back down to a lower income quintile in the future during their retirement years, which is just part of the natural lifetime cycle of moving up and down the income quintiles for most Americans. So when we hear the President and the media talk about an "income inequality crisis" in America, we should keep in mind that basic household demographics go a long way towards explaining the differences in household income in the United States. And because the key income-determining demographic variables change over a person's lifetime, income mobility and the American dream are still "alive and well" in the US.

 ---

from Carpe Diem:

'Rich America' is not the 'idle rich,' but rather a working America, an educated America and a married America 'Rich America' is not the 'idle rich,' but rather a work... In a December 2013 CD post, I featured the chart above (click to enlarge) that displays Census Bureau data of various household demographic factors by i... View on feedproxy.google.com Preview by Yahoo Posted: 04 Feb 2014 01:22 PM PST In a December 2013 CD post, I featured the chart above (click to enlarge) that displays Census Bureau data of various household demographic factors by income quintile in 2012 (education, marital status, average number of earners, percent working full-time, age, etc.) that help us understand the factors that explain differences in household income. In a recent National Review article ("The Working Rich"), Kevin Williamson refers to some similar, slightly older data (from 2011 I think) to make several important points: a) the wealthiest and highest-earning Americans are not "idle rich" but rather work very hard for their money, and b) the poor can learn some lessons from them to become more wealthy themselves. Here's an excerpt: Rich America is working America: Wealthy households contain on average more than four times as many full-time workers as do poor households, and, surprisingly, inherited wealth constitutes a smaller share of their assets than it does for middle-class and poor households. They live modestly relative to their means and for the most part do not work on Wall Street or as corporate executives. The caricature of the rich American as a child of privilege who inherited a fortune and spends his days shuttling between mansions in a private jet is largely a product of the imagination of such would-be class warriors as Elizabeth Warren and Robert Reich, neither of whom lives in Section 8 housing, or even downwind of it. There is a reason that money earned from work accounts for a relatively large share of the holdings of rich Americans: They work more — a lot more. While Census Bureau data document a very large gap in the prevalence of college degrees among the top 20 percent  of  households vs. the bottom 20 percent, there is an even larger and more significant gap — 60 percentage points — between full-time employment for householders in the top income group (78.2% in 2012, see chart above) vs. the bottom income group (18.2%). There is, to be sure, such a thing as the working poor, but the most salient characteristic of poor households is the lack of full-time workers in them. For the bottom income group, there is an average of 0.42 earners per household (0.45 in 2012), with 68.2 percent (67.3 percent in 2012) of householders not working at all, as opposed to 1.97 earners (2.04 in 2012) per household and only 13.3 percent (12.5 percent in 2012) not working for the highest income group. The answer to poverty turns out to be "get a job," after all — though that should be an aspiration toward which we assist the poor rather than a contemptuous dismissal of their needs. Family matters. Not surprisingly, 78.4 percent (77.5 percent in 2012) of those highest-income families were married couples, as opposed to 17 percent (18.2 percent) for the lowest-income group. What this all means in brief is that the highest-income families are composed almost exclusively of two-earner households, the overwhelming majority of them married couples. Those who are inclined to see public policy mainly through green eyeshades may sniff at the social conservatives and their quaint worries about marriage, but there is a very strong connection between how we conduct our family lives and our economic outcomes — the very word "economy" derives from the Greek term for household administration, οἰκονομία. All the best people may roll their eyes at "tiger mom" Amy Chua's admiration for Asian-American, Nigerian-American, and Mormon domestic culture, but it is difficult to dismiss the results. MP: As I concluded in my December post, household demographics like the average number of earners per household and the marital status, age, and education of householders are all very highly correlated with household income. Specifically, high-income households have a greater average number of income-earners than households in lower-income quintiles, and individuals in high income households are far more likely than individuals in low-income households to be well-educated, married, working full-time, and in their prime earning years. In contrast, individuals in lower-income households are far more likely than their counterparts in higher-income households to be less-educated, working part-time, either very young (under 35 years) or very old (over 65 years), and living in single-parent households. The good news is that the key demographic factors that explain differences in household income are not fixed over our lifetimes and are largely under our control (e.g. staying in school, getting and staying married,etc.), which means that individuals and households are not destined to remain in a single income quintile forever. Fortunately, studies that track people over time indicate that individuals and households move up and down the income quintiles over their lifetimes, as the key demographic variables highlighted above change. And as Kevin points out, if the poor pay attention, they can learn from the rich and become better off themselves by investing in education, getting and staying married, and working full-time.

Is Inequality a Problem that needs Fixing?

Put me down for a "NO" on this one.