Published on Real-World Economics Review Blog, by Peter Radford, March 1, 2014.

I am preparing a talk on inequality here in America, and so have been re-reading the Piketty and Saez work. Amongst the more eye-opening facts I have come across is the assertion, by Saez, that the surge in the top 1% incomes is so large that the growth of the bottom 99% amounts to only half the average [mean].

Think about that for a moment.

It would be like walking into a room full of people two feet tall with one thirty footer in the corner. The mean average is meaningless in such circumstances. We are all taught that in statistics class, but to come across such an egregious example in a dataset as large as all US tax returns is astonishing.

Not only is this an alarming fact, but to portray it adequately on a chart is difficult to do. The line representing that 1% doesn’t fit well with the 99%  because any scale you use cannot easily accommodate such extremes.

When I chat with people about the topic I realize that most have no clue as to how skewed and screwed up the economy now is. Even when they start to comprehend they retreat into a kind of ‘it doesn’t affect me’ denial.  The fact seems to be that most people want to cling onto the mythological image of America they carry with them, perhaps because confronting the reality we have made for ourselves means accepting unpleasant and disturbing facts.

Yet they’ve all been hurt by what happened … //

… (full text).


Some links, 28/2/2014: Inequality, trust and money (and bad Troika policies), on Real-World Economics Review Blog, by merijnknibbe, Feb 28, 2014;

We Sue CalPERS Over Denial of Our Private Equity Public Records Act Request, on naked capitalism, by Yves Smith, Feb 28, 2014.

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