Obvious and Fascinating

This is an example of what "Guns Germs and Steel" explained in the evolution from hunter gatherer to agriculturalist.

Basic premise - agriculture made humans sick and frail relative to hunter gatherers, but also let them reproduce at a 4x higher rate. It allowed humans to have specialists like blacksmiths, carpenters and politicians, and combined with the higher populations led to the displacement of the hunter gatherers all around the world. History was there to watch it happen in the 1800s in north america, when, for example, the dominant plains tribe, the Comanche reached a population of 20,000.  By then there were millions of european immigrants and their children. It was only a matter of time. 

-Roughly 9,000 years ago farmers from the Middle East headed toward Europe, seeking new land to cultivate.
-The farmers traveled either along the Mediterranean coast or the Danube River, encountering hunter-gatherers who lived in dense forests.
-At first, the farmers and hunter-gatherers traded or mated. By 5,000 years ago, however, agriculture dominated the continent and hierarchical societies had evolved.
-Genetic studies suggest that individuals with high hunter-gatherer ancestry may have been treated as inferiors.

https://www.scientificamerican.com/article/when-the-first-farmers-arrived-in-europe-inequality-evolved/

The People Who Dare To Speak Truth To Power

"Explanations for this somewhat counterintuitive trend include the tendency of women to enter STEM fields in Arab and Muslim countries, where a high proportion of young men are shopkeepers or study in religious seminaries, as well as the ability of women in more open societies to pursue what they desire. As Murray puts it, in Scandinavia and other highly equal countries, “both sexes become freer to do what comes naturally.”"
https://www.realclearbooks.com/articles/2020/04/15/charles_murrays_real_talk_on_biological_differences_489205.html

What Does "inequality" Mean and How Should it Be Measured?

I should memorize this article.

There is a simple theory of inequality in which rich people have nearly all the wealth and income, and do nearly all the spending, while poor people struggle along with the minimum of those things necessary for survival. It’s understandable that some people think this way. In many places in the world today, and for most complex societies in human history, the picture is accurate. Moreover, the rich elite usually hoards most of the economic opportunity, civil freedoms, political power, legal status and other good things for itself and its children.
https://www.realclearmarkets.com/articles/2019/12/03/inequality_is_decidedly_not_the_problem_in_the_us__103991.html

Inequality, Thank Goodness

I'll admit I have not read anyone's in depth analysis on why inequality is anything other than inevitable. Once government has enough power to regulate equality, it will regulate all the money to the insiders. 

Inequality is another "emperor's clothes", people talk about it but there's never been a point at which it was established that it matters, and there's no public debate about why it matters. If inequality were the result of government interference, on the other hand, that would matter to those who value liberty. 

http://www.msn.com/en-us/money/personalfinance/heres-how-much-money-it-takes-to-be-among-the-richest-50-percent-of-people-worldwide/ar-BBPSBdV?ocid=ientp

Dr. Sowell at his best:

"For 12 consecutive years -- from 2001 through 2012 -- each home run leader in the American League had a Hispanic surname. When two American boys whose ancestors came from India tied for first place in the U.S. National Spelling Bee in 2014, it was the 7th consecutive year in which the U.S. National Spelling Bee was won by an Asian Indian.

"We all know about the large over-representation of blacks among professional basketball players, and especially among the star players. The best-selling brands of beer in America were created by people of German ancestry, who also created China's famed Tsingtao beer. Of the 100 top-ranked Marathon runners in the world in 2012, 68 were Kenyans. The list could go on and on. Although blacks are over-represented among professional football players, even the most avid National Football League fan is unlikely to be able to recall seeing even one black player who kicked a punt or a point after touchdown.

"Should there be an article titled: "What's Holding Black Kickers Back in the NFL?" Could it be that blacks are more interested in playing positions where there is more action and -- not incidentally -- more money?

"Should there be an article titled: "What's Holding Back Whites in the National Basketball Association?" Or an article titled: "What's Holding Back Non-Asian Indian Kids from Winning the Spelling Bee?" Lawsuits claiming discrimination have been won on the basis of statistical disparities far smaller than these."

http://www.realclearpolitics.com/articles/2015/10/06/charlatans_and_sheep_128321.html

The Null Hypothesis for Income and Wealth | askblog

http://www.arnoldkling.com/blog/the-null-hypothesis-for-income-and-wealth/

The Null Hypothesis for Income and Wealth

The abstract of a working paper by David Cesarini and others says,

We use administrative data on Swedish lottery players to estimate the causal impact of wealth on players' own health and their children's health and developmental outcomes. Our estimation sample is large, virtually free of attrition, and allows us to control for the factors ‒ such as the number of lottery tickets ‒ conditional on which the prizes were randomly assigned. In adults, we find no evidence that wealth impacts mortality or health care utilization, with the possible exception of a small reduction in the consumption of mental health drugs.

Our estimates allow us to rule out effects on 10-year mortality one sixth as large the cross-sectional gradient. In our intergenerational analyses, we find that wealth increases children's health care utilization in the years following the lottery and may also reduce obesity risk. The effects on most other child outcomes, which include drug consumption, scholastic performance, and skills, can usually be bounded to a tight interval around zero. Overall, our findings suggest that correlations observed in affluent, developed countries between (i) wealth and health or (ii) parental income and children's outcomes do not reflect a causal effect of wealth.

Pointer from James Pethokoukis.

Somebody should replicate this study in the United States. I would not be surprised if the effects on child outcomes were closely bounded to a tight interval around zero here, also.

This is the sort of evidence that I wish Robert Putnam would confront.

Piketty On Piketty

Mr. Piketty has backtracked, undermining the policy prescriptions many have based on his conclusions. In "About Capital in the 21st Century," slated for May publication in the American Economic Review but already available online, Mr. Piketty writes that far too much has been read into his thesis. 

Though his formula helps explain extreme and persistent wealth inequality before World War I, Mr. Piketty maintains, it doesn't say much about the past 100 years. "I do not view r>g as the only or even the primary tool for considering changes in income and wealth in the 20th century," he writes, "or for forecasting the path of inequality in the 21st century."

http://www.wsj.com/articles/robert-rosenkranz-piketty-corrects-the-inequality-crowd-1425854415

Hmm, well, I guess that settles that. 

"But the Numbers Don't Lie"

The commonplace view of scientific method is that hypotheses ("Inequality will always rise", "Inequality causes depression", "Temperatures have just shot up", "Culling badgers cures bovine TB") can only be rejected, or falsified. Experimental data is used in an attempt to "disprove" the null version of these hypotheses (that is, their converses: "Inequality isn't rising", and so on), in a fairly antiquated and hugely flawed statistical process known as "significance testing". If a significance test is positive, people not trained in statistical reasoning – newspaper columnists, Leftists with books to sell – have a tendency to start claiming that "the science has been proven."

It hasn't (even those statisticians who continue to hawk significance testing as a valid approach to induction wouldn't make that claim), and in any case, this isn't how our reasoning about the universe works.

http://blogs.telegraph.co.uk/news/graemearcher/100273348/climategate-the-spirit-level-the-hockey-stick-and-now-thomas-piketty-lefties-sure-do-have-a-way-with-numbers/

1%ers Just a Flash

The top 1 percent, as I have noted here before, is such an unstable group that it makes no sense to write, as so many progressives do, about what has happened to its income over the past ten year or twenty years, because it does not contain the same group of people from year to year. Citing tax scholar Robert Carroll's examination of IRS records, Professor Rank notes that the turnover among the super-rich (the top 400 taxpayers in any given year) is 98 percent over a decade — that is, just 2 percent of that elusive group remain there for ten years in a row. Among those earning more than $1 million a year, most earned that much for only one year of the nine-year period studied, and only 6 percent earned that much for the entire period.

http://www.nationalreview.com/article/376231/politics-poverty-kevin-d-williamson/page/0/1

Count me a skeptic on conservative political answers or on anyone's 1%er whines.


Another good nugget:  As Rank hints, what is hereditary in the United States is not wealth but poverty. 


And the coup de grace:

Like most anticapitalists, Professor Piketty is taken with the question of inequality rather than with the separate question of poverty, and his focus is most intensely upon those high-earning managers of capital. But as Clive Crook notes in hisreview of the book, the question of whether income inequality widens in the future “won’t matter as much as whether and how quickly wages and living standards rise.” Which is to say, if the real standard of living for the poor and the middle classes continues to increase — as it has for virtually the entire history of modern capitalism — then it will not matter if the standards of living for the very wealthy increase even more quickly. On the other hand, if living standards decline or stagnate, it will not matter very much to anybody besides political entrepreneurs whether inequality also decreases. Higher standards of living across the board are perfectly compatible with higher levels of income inequality, a pattern that has been seen not only among such alleged practitioners of cowboy capitalism as the United States but also in European welfare states such as Sweden, where income inequality is increasing just as it is in the United States.

What Does the Term "Inequality" Mean?

The assumption I take from the depiction of Thomas Piketty’s book – the radicalism of which David Harsanyi details today – is that we are talking about income inequality in the aggregate. There are lots of people, you see, and there are a ton of them who make very little money, and there is a smaller amount who make slightly more money, and then there is an even smaller amount who make slightly more than them, and then there is a very tiny amount who make a good bit more than them, and then there is an even tinier amount who have the ability to swim in vast vaults of golden coins while dressed in their smoking jackets.

From the left’s perspective, this is a negative ramification of capitalism. In reality, it ought to be considered one of its virtues. This inequality of outcome was historically driven by hardened class systems – not so in a free market economy.

http://thefederalist.com/2014/04/23/why-inequality-doesnt-matter/

Lorda mercy this is a good read.  Here's another jewel:

The left continues to operate on an a priori assumption that income inequality/wealth concentration is a bad thing, because of those riches backstroking through their money. But that’s just a jealousy trope. Upon closer inspection, you’ll see that income inequality and wealth concentration don’t inhibit economic mobility; they don’t inhibit economic growth; and they are not detrimental to democracy or to human liberty. 

Duh. As If

Better still, his theory makes arresting claims -- "that a market economy," as Piketty puts it, "if left to itself, contains powerful forces of convergence [in the distribution of wealth]...; but it also contains powerful forces of divergence, which are potentially threatening to democratic societies and to the values of social justice on which they are based." And he argues that the divergent forces are likely to be more powerful in the 21st century than they were in the 20th.

http://www.bloombergview.com/articles/2014-04-20/the-most-important-book-ever-is-all-wrong

So what's the problem?

Quite a few things, but this to start with: There's a persistent tension between the limits of the data he presents and the grandiosity of the conclusions he draws. At times this borders on schizophrenia. In introducing each set of data, he's all caution and modesty, as he should be, because measurement problems arise at every stage. Almost in the next paragraph, he states a conclusion that goes beyond what the data would support even if it were unimpeachable.

Meaning, duh, as if it were possible to tell what role government plays in creating the inequality Mr. Piketty believes capitalism produces.  With government interwoven into nearly every economic transaction, if there's more inequality now than in this nation's past, who's to say that's not because of the role of government?  But more importantly, there's no reason to believe inequality per se makes things worse for those incompetents who are not able to compete in a capitalist system.  Generally, wealth producing economies make things better for folks of all levels of competence.

Government - Thriving on Inequality

Take his tax increases. He doubts that they would hurt economic growth. This seems questionable. Incentives must matter, at least slightly. Or consider his predicted slowdown in the world economy. This seems possible, but if it happens, capital owners would likely suffer lower returns. As for the power of the superrich, they hardly control most democracies. In the United States, where about 70 percent of federal spending goes to the poor and middle class, the richest 1 percent pay nearly a quarter of federal taxes. After-tax and post-government-transfer incomes are less unequal than Piketty's pretax figures.

Read more: http://www.realclearpolitics.com/articles/2014/04/21/class_warfare_justified_122337.html#ixzz2zWFztz2B 
Follow us: @RCP_Articles on Twitter

The idea that governments are the right tools to limit inequality kind of makes me laugh.  The idea that inequality hurts anyone is also laughable - mainly, inequality of outcomes gives politicians what they want most - a reason to make us fight with each other.  

Where Inequality Is Worst In The United States

Morrill's findings puncture the mythology espoused by some urban boosters that packing people together makes for a more productive and "creative" economy, as well as a better environment for upward mobility. A much-discussed report on social mobility in 2013 by Harvard researchers was cited by the New York Times, among others, as evidence of the superiority of the densest metropolitan areas, but it actually found the highest rates of upward mobility in more sprawling, transit-oriented metropolitan areas like Salt Lake City, small cities of the Great Plains such as Bismarck, N.D.; Yankton, S.D.; Pecos, Texas; and even Bakersfield, Calif., a place Columbia University urban planning professor David King  wryly labeled "a poster child for sprawl."

Demographer Wendell Cox pointed out that the Harvard research found that commuting zones (similar to metropolitan areas) with less than 100,000 population average have the highest average upward income mobility.

http://www.forbes.com/sites/joelkotkin/2014/03/20/where-inequality-is-worst-in-the-united-states/

What Drives Success? - NYTimes.com

http://www.nytimes.com/2014/01/26/opinion/sunday/what-drives-success.html?ref=todayspaper&_r=0
A SEEMINGLY un-American fact about America today is that for some groups, much more than others, upward mobility and the American dream are alive and well. It may be taboo to say it, but certain ethnic, religious and national-origin groups are doing strikingly better than Americans overall.

Indian-Americans earn almost double the national figure (roughly $90,000 per year in median household income versus $50,000). Iranian-, Lebanese- and Chinese-Americans are also top-earners. In the last 30 years, Mormons have become leaders of corporate America, holding top positions in many of America's most recognizable companies. These facts don't make some groups "better" than others, and material success cannot be equated with a well-lived life. But willful blindness to facts is never a good policy.

Jewish success is the most historically fraught and the most broad-based. Although Jews make up only about 2 percent of the United States' adult population, they account for a third of the current Supreme Court; over two-thirds of Tony Award-winning lyricists and composers; and about a third of American Nobel laureates.

The most comforting explanation of these facts is that they are mere artifacts of class — rich parents passing on advantages to their children — or of immigrants arriving in this country with high skill and education levels. Important as these factors are, they explain only a small part of the picture.

Today's wealthy Mormon businessmen often started from humble origins. Although India and China send the most immigrants to the United States through employment-based channels, almost half of all Indian immigrants and over half of Chinese immigrants do not enter the country under those criteria. Many are poor and poorly educated. Comprehensive data published by the Russell Sage Foundation in 2013 showed that the children of Chinese, Korean and Vietnamese immigrants experienced exceptional upward mobility regardless of their parents' socioeconomic or educational background.

Myth-Making About Economic Inequality | RealClearPolitics

Unless you are exceptionally coldblooded, it's hard not to be disturbed by today's huge economic inequality. The gap between the rich and the poor is enormous, wider than most Americans would (almost certainly) wish. But this incontestable reality has made economic inequality a misleading intellectual fad, blamed for many of our problems. Actually, the reverse is true: Economic inequality is usually a consequence of our problems and not a cause.

For starters, the poor are not poor because the rich are rich. The two conditions are generally unrelated.

Read more: http://www.realclearpolitics.com/articles/2014/02/03/myth-making_about_economic_inequality_121433.html#ixzz2sH6bU4Wl 
Follow us: @RCP_Articles on Twitter

Unicorns and Wage Gaps

Consider, for example, how men and women differ in their college majors. Here is a list (PDF) of the ten most remunerative majors compiled by the Georgetown University Center on Education and the Workforce. Men overwhelmingly outnumber women in all but one of them:

1.   Petroleum Engineering: 87% male
2.   Pharmacy Pharmaceutical Sciences and Administration: 48% male
3.   Mathematics and Computer Science: 67% male
4.   Aerospace Engineering: 88% male
5.   Chemical Engineering: 72% male
6.   Electrical Engineering: 89% male
7.   Naval Architecture and Marine Engineering: 97% male
8.   Mechanical Engineering: 90% male
9.   Metallurgical Engineering: 83% male
10. Mining and Mineral Engineering: 90% male

http://www.thedailybeast.com/articles/2014/02/01/no-women-don-t-make-less-money-than-men.html

Ari Fleischer: How to Fight Income Inequality: Get Married - WSJ.com

"Marriage inequality" should be at the center of any discussion of why some Americans prosper and others don't. According to Census Bureau information analyzed by the Beverly LaHaye Institute, among families headed by two married parents in 2012, just 7.5% lived in poverty. By contrast, when families are headed by a single mother the poverty level jumps to 33.9%.

And the number of children raised in female-headed families is growing throughout America. A 2012 study by the Heritage Foundation found that 28.6% of children born to a white mother were out of wedlock. For Hispanics, the figure was 52.5% and for African-Americans 72.3%. In 1964, when the war on poverty began, almost everyone was born in a family with two married parents: only 7% were not.

Attitudes toward marriage and having children have changed in America over the past 50 years, and low-income children and their mothers are the ones who are paying the price. The statistics make clear what common sense tells us: Children who grow up in a home with married parents have an easier time becoming educated, wealthy and successful than children reared by one parent. As the Heritage study states: "The U.S. is steadily separating into a two-caste system with marriage and education as the dividing line. In the high-income third of the population, children are raised by married parents with a college education; in the bottom-income third, children are raised by single parents with a high-school diploma or less."

http://online.wsj.com/news/articles/SB10001424052702304325004579296752404877612

Marriage inequality is a substantial reason why income inequality exists. For children, the problem begins the day they are born, and no government can redistribute enough money to fix it. If redistributing money could solve the problem, the $20.7 trillion in 2011 dollars the government has spent on welfare programs since 1964—when President Johnson declared the "war on poverty"—would have eliminated income inequality a long time ago.

Good luck with that. The tax code is already extremely progressive, as a December study by the Congressional Budget Office makes clear, yet poverty remains a significant problem. According to CBO, the top 40% of wage earners, those who make more than $51,100 a year, paid 86.4% of all federal taxes in 2010, the most recent data available. The bottom 40% of earners paid just 4.2% of all taxes. The top 40% paid virtually all of the income tax collected, while the bottom 40% paid a negative 9.1% of all income taxes. Paying "negative" taxes is possible because of the earned-income tax credit and other public-assistance measures that give the bottom 40% refunds for taxes they didn't pay.

Editorial: Rising incomes matter more than disparity | percent, income, obama - Opinion - The Orange County Register

If President Obama is to be believed – and few conditional clauses give us more pause – the greatest economic challenge facing the nation is income inequality. He referred to it this month as "the defining challenge of our time," the sort of superlative that always makes us suspect that a politician is up to something.

In this case, the strategy seems to be attempting to distract the nation from two undeniable realities that have much more plausible claims as "defining challenges": an economy that has been lethargic for half a decade and a health care overhaul that may yet go down as the single-most conspicuous failure of big government in American history.

Political calculations aside, we'll take Mr. Obama at his word that he genuinely believes income inequality is a serious problem. Here's our question, asked in earnest: Why?

Mr. Obama errs when he emphasizes economic inequality because he socializes the analysis. Consider this hypothetical example: Two individuals, one of whom makes $40,000 a year and one of whom makes $1 million. If both were to realize a 50 percent increase in income, the former would make $60,000 a year, while the latter would make $1.5 million. The inequality between the two has grown, but both are better off.

This hypothetical underscores the key point: Individual wealth is a meaningful metric; wealth disparity is not.

http://www.ocregister.com/articles/percent-594238-income-obama.html

Inequality for Dummies - NYTimes.com

A widely praised 2012 book, "Why Nations Fail," argues that historically when the ruling elites have pulled up the ladder and kept newcomers from getting a foothold, their economies have suffocated and died. "The most pernicious fact of inequality is when it translates into political inequality," said Daron Acemoglu, a co-author of the book and a Massachusetts Institute of Technology economist. "That means our democracy ceases to function because some people have so much money they command greater power." The rich spend heavily on lobbyists and campaign donations to secure tax breaks and tariff advantages and bailouts that perpetuate their status. Not only does a dynamic economy stagnate, but the left-out citizenry becomes disillusioned and cynical. Sound familiar?

http://www.nytimes.com/2013/12/23/opinion/inequality-for-dummies.html?_r=0

He's making a good case for limited government, from which the wealthy may not purchase influence.

Inequality and Unicorns, Darlings of the Progressives

Virtually all of the data cited by the left to decry the supposed explosion of income inequality, as Lee Ohanian and Kip Hagopian point out in their seminal paper, "The Mismeasure of Inequality" (Policy Review, 2011), use a Census Bureau definition of "money income" that excludes taxes, transfer payments like Medicaid, Medicare, nutrition assistance, the Earned Income Tax Credit, and even costly employee benefits such as health insurance.

Thus the data that is conventionally used to calculate the so-called Gini coefficient—the most commonly used measure of income inequality—ignore America's highly progressive income tax system and the panoply of benefits and transfer payments. According to Messrs. Ohanian and Hagopian, once the effect of taxes and transfer payments is taken into account, "inequality actually declined 1.8% during the 16-year period between 1993 and 2009, when the Gini coefficient dropped from .395 to .388."

http://online.wsj.com/news/articles/SB10001424052702303773704579269990020773098

"Seek and you shall find."  Unless what you seek is a reason why inequality of income or wealth matters.  I have yet to find even a bare bones explanation that goes beyond voodoo and chicken bones for rationale.