Is Capitalism a huge swindling machine or "slouching toward utopia"? [View All]

[JanMichael]

This should be a fun thread. It covers several different issues like Income Mobility, Generational Quintile Mobility, and Globalization. Even Paul Krugman gets a mention in this first article:

http://www.monthlyreview.org/0204yates.htm

"Interestingly, states with greater inequality of income distribution also spent less per person on education, had fewer books per person in the schools, and had poorer educational performance, including worse reading skills, worse math skills and lower rates of completion of high school."

Can we all say "Banana Republic"? It seems the greater the income inequality the greater the chance that the truly poor will remain so.

"Great and growing inequality saps the political power of those at the bottom, making it more likely that the social welfare programs which help to alleviate the harmful consequences of poverty will be gutted, while at the same time making it more likely that policies which further favor the rich will be put in place. The poor are increasingly filled with hopelessness and despair as they contemplate the yawning gap between them and those at the top.7"

This is such a difficult concept to relate to people. The fact is that the lower one goes the lower one's power, I mean resources and perhaps even one's Will, to fight back deteriorates. The deck gets perpetually stacked. It should be an easy thing to grasp but I'll bet you anything (OK, not anything, nothing.) that this thread draws out some that will vehemently disagree...

This article is referenced in the previous article. It lays out the current statistical relationships between Parent to Child quintile movement over time.

http://www.irs.princeton.edu/krueger/intergen2.htm

"Furthermore, the degree of persistence across generations is strong for both rich and poor. Thomas Hertz of American University finds that a child born in the bottom 10 percent of families ranked by income has a 31 percent chance of ending up there as an adult and a 51 percent chance of ending up in the bottom 20 percent, while one born in the top 10 percent has a 30 percent chance of staying there and a 43 percent chance of being in the top 20 percent."

Super Quintile/Income Mobility is one of the perpetual disingenuous tales told by our Media.

"In another study, David I. Levine of Berkeley and Dr. Mazumder found that the impact of parental income on adult sons' income increased from 1980 to the early 1990's."

What a shocker! Reagan did a fine job protecting the Rich and Powerful.

GRAPHIC: Chart: "Like Parent, Like Child"

Recent studies find that there is less income mobility from one generation to another than previously believed.

PARENTS INCOME QUINTILE: Top 20%

CHANCE OF CHILDREN ATTAINING EACH INCOME LEVEL

Top quintile: 42.3 %

Middle quintile: 16.5

Bottom quintile: 6.3



PARENTS INCOME QUINTILE: Middle 20%

CHANCE OF CHILDREN ATTAINING EACH INCOME LEVEL

Top quintile: 15.3

Middle quintile: 25.0

Bottom quintile: 17.3



PARENTS INCOME QUINTILE: Bottom 20%

CHANCE OF CHILDREN ATTAINING EACH INCOME LEVEL

Top quintile: 7.3

Middle quintile: 18.4

Bottom quintile: 37.3
====================================

So is it a self protecting Swindling Machine or an engine slouching us all toward Utopia?