Posted by
Deane Pradzinski on Thursday, January 17, 2008 6:50:34 PM
Ignorance is expensive-
“Wealth is not a pizza.” — P.J. O’ Rourke
The people in the top 1% are not the same people every year and certainly not every
decade. “They” don’t sit around figuring out how to get a bigger share of the pie and
passing laws to keep the rest of treading water.
Between 1930 and 1939, the income of the top 1% fell 7%. Did that mean that the other
99% did better? They did not. That was the worst economic decade of the 20th century.
The fall in the well-being of the top 1% was symptomatic of everyone’s suffering rather
than an indication that the pie was divided more fairly.
I suspect people care more about the absolute size of their slice than they do about
whether they are getting a bigger or a smaller share. Especially when you have no idea
of what your share of the pie is. You might be able to tell me your money income last
year. You would have a harder time telling me your compensation—your money
income plus a monetary value for the fringe benefits you received—health and dental
care and any retirement contribution of your employer. You might even be able to tell
me whether your compensation last year is larger than it was five years ago. But even if
you knew the full number inclusive of fringe benefits and that number five years ago,
there’s no way you know whether you’ve “fallen behind” or “gotten ahead” of other
Americans—whether you’re ranking in the income distribution has gone up or down.
Unless you’re Sergei Brin. He’s gotten ahead. He founded Google, going from
somewhere near the middle to the very top. When he and others did that, they may
have increased the share “going to the top 1%.” But the top 1% of the population didn’t
necessarily get richer. Just the amount of money in the top 1%. They are not the same
thing.