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Pastimes : Discussion Thread -- Ignore unavailable to you. Want to Upgrade?

To: c.hinton who wrote (2572)	11/7/2008 4:28:38 PM
From: TimF	Read Replies (1) \| Respond to of 3816

tim the very very rich comprise much less than the top ten percent of wage earners. I know, and I said as much. But the available hard data was about the top 10%. the mega rich operated in a non regulated environment with taxes that were a fraction of those in the 50s. They didn't operate in a non-regulated environment, esp. in the 30s when regulations came out fast and hard over all sorts of aspects of the economy, but even in the much less regulated 20s. And sure taxes where lower in the earlier years (particularly nominal income tax rates, but even the total tax burden was lower to a lesser extent), but the whole economy was so much richer in the 50s that there was plenty of opportunity to generate a ton of wealth (particuarly compared to the 30s when many rich and even mega rich lost a large part of their fortune, but even the 20s where a much less wealthy time than the 50s) and the stock market did not recover to its 1929 heights till 1955 The 50s didn't end in 55, the twenties didn't begin in 1929, and the "twenties and the thirties" didn't end in '29. Compare the stock market in 21 or 33 to the stock market in 59. As for gold it was at or close to $35 for most of the 30s and much of the 50s. Not that gold is a perfect measure of inflation (there was inflation between 12/31/1934 and 12/31/1969 despite the closing prices for gold being almost the same), but when you adjust for other measures of inflation stocks, GDP per capita, income per capita, etc. where higher in the 50s than in the period from 1/1/20 to 12/31/39. You only look at the blow out peak of a bubble, not the overall average. And the Dow Jones stocks where hardly the only investments that made money in the 50s. Look at this spreadsheet bea.gov It only goes back to 1929 but lets use that figure, its generous to your argument as the GDP up to 1929 was less, and after 1929 was less for several years (until '41 in nominal dollars and until 1936 in inflation (or in this case deflation) adjusted dollars). In 2000 dollars GDP was 865.2 billion in 1929, the 1930 census give a population of 123,202,624. 865 bil / 123 mil is a 7032.52 By the end of the 50s GDP per capita was almost double that. And remember we are measuring from the peak of a bubble by picking 1929. Go back to say 1920 and the difference would be noticeably greater. Which doesn't make it impossible for the mega rich to have had less in the 50s but it makes it rather difficult. Certainly the top 10 percent had more income (using this data, combined with the data at your Krugman link about percentage of income going to the top 10%), in the 50s. The mega rich? Well I haven't seen any evidence that suggest their percentage of the total income in the 50s was less than half of what it was in the twenties and thirties. And if you measure from before 1929 the difference in percentage would have to be even greater. Of course there is some ambiguity about what is meant by "mega rich". Clearly not "the top 10%" (on in 10), but would the top percent of a percent qualify (one in 10,000)? Or are you talking more about something like "the 20 richest people in the country" (one in more than 5 million, in 1930, and an even greater number in later years). There could well be some definition where the "mega rich" might have more income in the earlier period, but if so not to a really massive extent. Not enough to be really meaningful. Unless your talking about relative income rather than absolute income, and you might consider that to be a more important issue, but it would be changing the topic.