The Thuckmeister’s been a bit quiet these days. He’s taking it in the teeth on at least two fronts.
First, the Common Core standards pushed by John Huppenthal, whom Thucky worships and adores, are not holding up to public scrutiny. This is not my area, I’ll readily admit, but check out this post at Salon: Common Core propaganda fails: Well-financed education “reformers” fight common sense.
Second, his other heroes, Richard Rogerson and Edward Prescott, remain in near total obscurity, while Thomas Piketty, whom ole Thuckenheimer labeled a fraud, is becoming a household name. Piketty’s book, Capital in the Twenty-First Century, is at the top of the best seller lists. It’s out of stock at Amazon.
And it’s awesome. I’m about halfway through. Piketty is only in his early 40’s, yet he’s amassed an unimaginable knowledge base. It’s not only the data he’s compiled, which even those on the right acknowledge is unprecedented. Piketty supplements and supports that data with information about life in 18th and 19th century France and Britain drawn from a seemingly encyclopedic knowledge of literature. He then applies impeccable analysis and logical thinking to that information base, to give a crystal clear view of where we are and where we may be headed.
And, yes, it validates pretty much everything I’ve been saying on these pages.
The reviews are too numerous to mention, but here’s a sample from one by Tim Donovan at Salon, The right’s Piketty nightmare: Coming of age in the era of Post-Exceptionalism:
America’s recent economic “growth,” a mirage caused by gains made by the absolute richest of the rich, has also been recently outlined by French economist Thomas Piketty, in his “magisterial,” “seminal” and “definitive” book, “Capital in the 21st Century.” For liberals who’ve been beating the drum of inequality’s democratic and economic dangers for years (and in some cases, decades), Piketty’s book provides the intellectual firepower to firmly defend these assertions. And beyond writing a popular and highly influential book, Piketty (and his associates Emanuel Alvaredo, Salvatore Morelli, Sylvain Riffe Stern and Paul Segal) have compiled the “World Top Incomes Database,” an in-depth source of historical data on income inequality that researchers have only begun to explore.
While Piketty’s book provides compelling evidence of the shocking, destabilizing expansion of wealth among the richest of the rich in the modern world, it’s also been vitally important in reframing inequality as the struggle between capital and labor. In his long and glowing review of the book, New York Times columnist and Pulitzer Prize-winning economist Paul Krugman outlines why this is so important:
The general presumption of most inequality researchers has been that earned income, usually salaries, is where all the action is, and that income from capital is neither important nor interesting. Piketty shows, however, that even today income from capital, not earnings, predominates at the top of the income distribution. He also shows that in the past — during Europe’s Belle Époque and, to a lesser extent, America’s Gilded Age — unequal ownership of assets, not unequal pay, was the prime driver of income disparities. And he argues that we’re on our way back to that kind of society.
And where does this leave poor Thucky and his conservative heroes? According to Donovan, here:
Conservatives can smear Piketty as a “Marxist,” or argue that liberals enjoy his findings because they confirm a set of preconceived notions, but what conservatives can’t do is provide credible solutions to our yawning inequality that have any basis in historical reality. At some point, conservative politicians will likely be forced to accept that redistributive economic policies are necessary if we want to fix our economy long-term (an admittedly impossible proposition in 2014). Conservative politicians who refuse to undertake this evolution will be left supporting a set of toxic, increasingly unpopular policies that encourage the worst vision of America — a land of massive, walled-off wealth surrounded by a sea of falling wages, rising prices, shrinking job opportunities and diminishing horizons for all but the very richest.
Donovan, continuing on, sums up what should be the takeaway from Piketty’s great work:
This is the America that most of us live in, and these are the challenges that most of us face. The sooner our politicians and media acknowledge this dark reality, rather than maintaining some idyllic illusion of greatness invented from generations past, the sooner we can start working to create new jobs, raise stagnant wages and restore the economy for the rest of us.
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The population of the US increased from 23 mill to 76 mill from 1860 to 1900. Gdp per person increased from 2500 to 6500. Gdp averaged over 10 percent increase. Really an unbelievable period of time when the us rose to the top. Government burden was only 5 percent as compared to todays 35 percent average.
We were rocketing. The subsistence levels you refer to were the influx of immigrants to the first rung of the ladder. Over 20 percent of each quartile moved up a quartile every year.
You have a lot of things wrong. Look at your own math. Population was 23 mil back in 1860, about 150 years ago, when huge chunks of our land mass were unsettled. In order for that population growth to repeat itself over the next 150 years, we’d have to find a way to cram over 4 billion people unto that same land mass, which with only 315 million people, is now fully settled, in some places densely. The numbers don’t work, Thuck. We have to find a way to make the economy work for all that’s not dependent on population growth.
The phrase welare is too comfortable doesnt catch it most correctly. Too entrapping is a better phrase.
I appreciate the tone. People actively seek countries that create prosperity and wealth creation. Population dense areas (cities) are the most desired. There is no reason why wealth creation can’t just keep climbing.
40 percent of the population is now in the top 10 percent by the 1980 benchmark. 14 percent are now in the top one percent.
The question is, where does the world want to live? Forty percent of Mexicans say the want to live in the United States. Why? Because we used to create jobs. No more, our tax rates are too
High, our regulation of business too burdensome and welfare is too comfortable.
The second falsehood is that sharing the fruits of the economy is like sharing a chicken. People sharing a chicken are negatively interdependent. One person eating more means that someone else eats less. As human beings, this model was burnt into our souls during the two million years while god was creating us out on the plains of the serengetti. Thus, the easy, cheap appeal of piketty’s thesis.
However, the thesis is false. Unlike the tribal economy, the poor and the rich are not negatively interdependent. Just a simple glance at world data reveals that the poor are much better off when an economy produces many more rich people, at least materially.
You either haven’t read the book, or your reading comprehension skills are lacking. Obviously, the poor are better off in the US and Europe than they are in Somalia. The issue is whether we are a sliding back towards a day when the bottom 90% in rich countries live barely above subsistence level, as they did in the U.S. during the Gilded Age and in Europe during the Belle Epoque. The poor and the middle class do best when the rich are rich, but not obscenely rich.
I’ll take the bait. Piketty’s book is very impressive. However, he pulls three slights of hand that obviate his entire thesis. First, he calls growth in gdp per person growth. It isn’t when there are significant variations in population growth and immigration. So, he asks us to belief that growth in USA is equal to France growth. 1980 to current job growth in usa is 50 million jobs. Job growth in France is 4 million jobs.
Case closed: France struggles, at best, because economists like pikety guide them and work to deceive us.
We struggle now because economists like pikety are guiding us now.
Piketty is thinking more globally than you are. But he’s also thinking more realistically. If the population growth of the US in the 21st Century matched that of the 20th, we’d be over a billion in 2100, which would give us a density roughly equivalent to China’s today. Even if that were desirable, how would we get there? The baby boomers are reaching 70. In 10 to 15 years, they’re going to start dying, and population growth in the US will slow to a trickle. Could we change our immigration policy to overcome that? Maybe, but that clashes with your second point. Economic growth via population growth via immigration is a zero sum game. Our growth from immigration is some other country’s loss through emigration.
Bottom line is that the US population growth of the 19th and 20th centuries is not sustainable. Nor was it intended to be. In 1800, we were a young country. Now, we’re a mature country. What worked for the last 100 years won’t work for the next 100.
We haven’t gotten our copy of Piketty’s book but does he address the sustainability issue with population growth? The reviews I’ve read so far about how he ties population growth to economic concern me. I’m seeing the usual frantic calls to increase the birth rate based on them.
I’m three quarters through the book, and he’s not advocated population growth at all. He simply makes the point that the population growth of the 20th century was an anomaly and that it contributed to outsized growth. In fact, I think he basically accepts the reality that population growth will slow to a trickle in the US, as it already has in Europe.
Thucky, on the other hand, is advocating that we increase the US population to 4 Billion by the year 2160.