Quote Of The Day

“The broader change in income distribution, the one occurring beneath the very top earners, can be deconstructed in a manner that makes nearly all of it look harmless. For instance, there is usually greater inequality of income among both older people and the more highly educated, if only because there is more time and more room for fortunes to vary. Since America is becoming both older and more highly educated, our measured income inequality will increase pretty much by demographic fiat. Economist Thomas Lemieux at the University of British Columbia estimates that these demographic effects explain three-quarters of the observed rise in income inequality for men, and even more for women.” — Tyler Cowen, in an article on Income Inequality

3 Responses to “Quote Of The Day”

  1. Karlo says:

    It’s an interesting article, but it has a quite a few leaps of logic that are left unexplained. The comment about how shopping at Walmart offsets income disparity for example involves some unstated argument equating income with availability of goods. Which is all fine if we apply the principle consistently, but we don’t learn whether the price of single-malt Scotch and yachts (the shopping of the rich) has fallen as well. The wild speculation about how much of the trend is caused because people are seeking more leisure (are you sure this guy isn’t getting France and the U.S. confused) or argument that people don’t work hard because they live alone and don’t have someone to care for certainly needs to be substantiated. Attributing many intellectuals’ misgivings about wealth to jealousy certainly falls within ad hominem argumentation. Using the same line of argument, (Along similar lines) maybe this bloke’s psychological justification is that he wants to justify his own wealth in the face of evidence that he doesn’t deserve it.

  2. Hey Karlo,

    The author is Tyler Cowen. Professor of economics at George Mason University. I doubt he makes that much money. He is just stating various economic arguments explaining income inequality.

    Regarding consumption inequality, yes, that is precisely what he is arguing: That Wal-Mart prices have been dropping while goods of the rich have been staying the same or increasing. See here for an explanation from Freakonomics author Steven Levitt, and here from one of the authors of the study.

  3. Fernando says:

    Merry Christmas People. 🙂

Leave a Reply