Are the rich getting richer and the poor getting screwed?
- snitzoid
- 22 hours ago
- 1 min read
This chart was published by the Visual Capitalist today. It tells a fairly typical story: the rich are doing great and the poor are making little progress. Any good progressive is all over this crap.
Only one problem. It tells the wrong story. James Sullivan (A Notre Dame economist) is one of the leaders in the field of consumption economics. Sullivan argues (& is often quoted by John Kennedy, Paul Ryan and other GOP politicos) that what matters is what people consume. You see, the Federal Government provides lots of goodies (transfer payments: think Welfare, Medicaid, etc) which changes the ability of citizens with low incomes to consume.
For example: In 1989 the bottom 50% of US citizens consumed 32% of total goods produced. Today that share is up slightly to 34%. By Sullivan's calculations the consumption poverty rate in this country during this time period dropped from 11.5% (ergo percent of folks consuming below poverty line) to 3-4.5%.
BTW, I know Professor Sullivan (he's my brother in law) and he's no fan of the GOP. I think he'd like to be described as a classical liberal (then again I'm usually wrong).
An article in 2014 (Politico) when his research came out.
