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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Mike Johnston who wrote (51746)	1/27/2006 4:02:59 PM
From: GraceZ	Read Replies (1) \| Respond to of 110194

At least I know how to read and comprehend what I read which is more than I can say for you. 1. You claim that incomes are exceeding inflation, wrong. Real wages have declined. No economist would agree with you. No economist would make a statement like "real wages have declined" without giving a time frame. But if you need the names of some well known economists that have claimed that real incomes have risen in the US over the last 10, 20, 30, 40 ,50 or 100 years I can give you a very long list. Notice that when this subject comes up it is always how one group has failed to keep up to some other group, never a blanket statement that real incomes have declined. One can always find sub groups whose incomes haven't moved up relatively to other groups in any time frame. 2. You claim that the richest 20% income group contains the most population. No comment necessary. Take what I write and misinterpret it this grossly and almost no one will disagree with you. The article used the quintiles. Income quintiles as maintained by the IRS and Census. These quintiles are compiled by return (IRS) and household (Census) not by individual incomes. Returns with two incomes and households with two income earners are mostly in the top two quintiles of the data kept by both the IRS and Census. The quintiles do not contain equal numbers of people. The quintile that contains the largest number of individuals is the top one, because it contains the largest number of dual income households. This is well known by pretty much everyone who works with this data except by the clowns who write these articles. 3. You claim that any inflation we have is caused by rapid income growth. Wrong. It is high inflation that allows some professions to experience high income growth while others lag. I would never state it that way and this is a gross misrepresentation of what I wrote. I went to great pains to explain this mechanism to you, it was completely lost on you. Did you even bother to read Baumol? I didn't think this stuff up, this was all figured out a long time before I even got interested in economics. If you don't read what has already understood, you are dooming yourself to making the same mistakes in logic that others made in the past. 4.You claim that money is being pumped into real estate. Wrong. It is just the opposite. Record amounts of home equity "wealth" have been monetized and spent. It is all debt, not savings. The equity draw down amounts are dwarfed by the amount of money spent in improvements on RE over the last five years. 600 billion came out and twice that went right back into improving and fixing up houses.