Author Archives: Jon Lowder

Captain Obvious Announcement: The Rich Get Richer

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Updated numbers show that in America the very wealthy got very wealthier during the last decade:

The Center on Budget and Policy Priorities released a report over the weekend showing that the gaps in after-tax income between the richest 1 percent of Americans and the middle and poorest fifths of the country more than tripled between 1979 and 2007. The CBPP concluded that the data suggests greater income concentration at the top of the income scale than at any time since 1928.

Check out the chart here for a little visual of what they're talking about.

Later on they point out that the numbers only cover up to 2007 so the Great Recession probably knocked the super wealthy down a peg, but I seriously doubt it put much more than a dent in the disparity.

One of the common arguments I hear about taxes, especially when the topic is progressive tax structures (i.e. higher tax rates on the wealthy) is that the wealthy pay more in tax dollars than the rest of us.  I find that argument pretty lame because in my mind the most important number is the net, not the gross, and as you can see from the numbers above the net income of the super wealthy, that is their income after taxes, has grown at a much higher rate than everyone else.  That means that even if they are paying a higher tax rate, and that's a big if (see this for a look at how the effective tax rate on the super wealthy is less than you'd think), their real net income gains have still far outpaced those of us who live here below the income stratosphere.  As your average middle classer I find that troubling.

Countdown to someone calling me a socialist: 10, 9, 8, 7…

Too Many Folks Don’t Get the Money Thing

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James Surowiecki writes that our financial illiteracy is a huge problem.  As someone who didn't care to learn about money until much too late in life and who, by the by, still has much to learn, I couldn't agree more. I also think his call for a financial equivalent to driver's ed is spot on. From the article:

The depth of our financial ignorance is startling. In recent years, Annamaria Lusardi, an economist at Dartmouth and the head of the Financial Literacy Center, has conducted extensive studies of what Americans know about finance. It’s depressing work. Almost half of those surveyed couldn’t answer two questions about inflation and interest rates correctly, and slightly more sophisticated topics baffle a majority of people. Many people don’t know the terms of their mortgage or the interest rate they’re paying. And, at a time when we’re borrowing more than ever, most Americans can’t explain what compound interest is.

Read more: http://www.newyorker.com/talk/financial/2010/07/05/100705ta_talk_surowiecki#ixzz0sGvkAfml

The Case for Vocational Education

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I've known quite a few people who just weren't cut out for college.  Not that they weren't "good" enough, just that they had no interest and honestly it's hard to be good at anything that you really aren't interested in doing.  That's one reason I've always found the phrase "He only went to community college" to be offensive and frightening.  Offensive because it implies that university graduates are superior people, when in fact all it says is that someone had the wherewithal to get through four years of higher education.  (Let's be honest: the vast majority of the jackholes who ran our economy into the ground have college degrees. Can we say MBA?) Frightening because our society needs young people to understand that the ability to earn an honest day's wage as a carpenter, electrician, computer technician or car repairman is honorable, and when we belittle vocational education we send the opposite message.

This column in The Economist looks at the problem:

America has a unique disdain for vocational education. It has supported such training since 1917; money now comes from the Perkins Act, which is reauthorised every six years. However, many Americans hate the idea of schoolchildren setting out on career paths—such predetermination, they think, threatens the ethos of opportunity. As wages have risen for those with college degrees, scepticism of CTE has grown too. By 2005 only one-fifth of high-school students specialised in an industry, compared with one-third in 1982. The share of 17-year-olds aspiring to four-year college, meanwhile, reached 69% in 2003, double the level of 1981. But the fact remains that not every student will graduate from university. This may make politicians uncomfortable, but it is not catastrophic. The Council of Economic Advisers projects faster-growing demand for those with a two-year technical-college degree, or specific training, than for those with a full university degree…

In the meantime, a bold new programme is inching forward. The National Centre on Education and the Economy (NCEE), a think-tank, is developing a test that students may take in their second year of high school. On passing, they could proceed to a community college or stay in high school to apply to a four-year university. Those who fail would take extra courses to help them pass. A pilot programme, supported by the Gates Foundation, will begin in eight states next year. Some parents are already outraged by the imagined spectre of tracking. Marc Tucker, who leads the NCEE, argues that a path to a community college might keep students engaged. Such a system would provide students with more opportunity, not less.

Libraries Building Out Digital Loan System

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An interesting article (subscription required) in the Wall Street Journal about libraries' efforts to lend more books electronically.

Starting Tuesday, a group of libraries led by the Internet Archive, a nonprofit digital library, are joining forces to create a one-stop website for checking out e-books, including access to more than a million scanned public domain books and a catalog of thousands of contemporary e-book titles available at many public libraries…

With its latest project, the organization is making inroads into the idea of loaning in-copyright books to the masses. Only one person at a time will be allowed to check out a digital copy of an in-copyright book for two weeks. While on loan, the physical copy of the book won't be loaned, due to copyright restrictions.

The effort could face legal challenges from authors or publishers. Paul Aiken, the executive director of the Authors Guild—which challenged Google's scanning efforts—said "it is not clear what the legal basis of distributing these authors' work would be." He added: "I am not clear why it should be any different because a book is out of print. The authors' copyright doesn't diminish when a work is out of print."

Mr. Kahle said, "We're just trying to do what libraries have always done."

A Voice of Principle and Reason

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President Obama wrote the following on Twitter: "With Robert Byrd's passing, West Virginia has lost a true champion, and America has lost a voice of principle and reason."

Let's put this in perspective.  That sentence was written by America's first black president about a man who while he was serving in Congress filibustered against the Civil Rights Act of 1964, and as a young man had belonged to the KKK.  Byrd later said that he regretted both of those decisions, but to me that even further highlights the change we've seen in this country in what is really a historical blink of an eye.

Here's an interesting fact for those of us who live in the Piedmont Triad of North Carolina: Byrd was born in 1917 in North Wilkesboro (about an hour from Winston-Salem) and was originally named Cornelius Calvin Sale, Jr. His mother died in the 1918 flu pandemic and he was adopted by his aunt and uncle from West Virginia and they changed his name to Robert Carlyle Byrd.  

Last Meal in NOLA

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Ate at Stanley’s for breakfast since the line at Cafe Du Monde was WAY too long. I highly recommend the Stanley eggs which is basically eggs benedict with fried oysters thrown in. The cajun breakfast potatoes are excellent too. And then there’s the chicory coffee…

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