Posts Tagged ‘epi’

The top 1% are different. Yes, they own more financial assets.

25 June 2013

Lawrence Mishel’s recent piece on inequality includes a very telling graph:


We see that the second half of the 1990s  is the first prolonged period when the top 1%’s income soared above that of the college educated in general; it coincided with the dot-com boom/bubble. We see a similar takeoff during the mid-2000s housing bubble and stock boom. In the market corrections/crashes that began in 2000 and 2007, we see the top 1%’s advantage mostly, but not completely, disappear. 

A combination of stock options, stock-market-based bonuses, and “Takes money to make money” seems to be at work here. The graph seems to be at odds with the common argument (Greg Mankiw’s?) that the top 1% deserve all they get because they are so much more productive, as it seems doubtful that their superior productivity deserts them in bad times.

Clashing clunkers

7 August 2009

The federal government’s “cash for clunkers” program has been the hot economic news item the past two weeks.  The program is novel, visible, finding lots of takers, and by far the most popular item in the stimulus package.  It is not without its critics, however, on both the economic and environmental fronts.  Let’s review the debate.

The first national “cash for clunkers” proposal, as far as I know, came from the eminent macro/policy economist Alan Blinder in a NYT column about a year ago. Blinder noted that smaller-scale programs had already been implemented in several states and Canadian provinces.  He touted it as a “public policy trifecta”:  (1) It would help the economy at low cost:  he estimated the cost of a good national program at about $20 billion, cheap in comparison with the then-stimulus of $168 billion (not to mention this year’s $787 billion stimulus).  (2) It would do a lot to reduce exhaust pollution, an estimated 75% of which comes from cars over 12 years old. As for the apparent waste of retiring old cars that still have some life in them, he said they could be refitted with new emissions controls and resold, or their scrap metal could be recycled. (3) It would be progressive in its impact, since it’s mostly poor people that drive those old clunkers.

My former graduate macro professor Willem Buiter had a typically hilarious and typically negative response, sarcastically titled “Please torch my car.”