Tuesday, November 1, 2011

Top 0.1% = 300,000 people, not really oligarchs

Prof. Krugman shares some enlightening information here that the lion's share of income gain is with the 0.1% (the 1% has shown some significant gain, and the top 20% have held steady with a disproportionate income share, but the 0.1% have been on a serious march of increasing income share in the past decade in particular).


I'm sympathetic to the idea that if nothing else, the top 0.1% can be made to pay much more taxes to our collective benefit, using other OECD nations as a reference (for that matter, the top 20% probably can too).

But I think it's a bit silly to call the 300,000 highest earners in the USA an oligarchy. Maybe there's some other better term. Maybe the notion that the USA is becoming an oligarchy rests on some other facts not discussed in his post.

Personally, I think there may be people with 1 in 1,000 talent for wealth accumulation, BUT that doesn't mean that we all wouldn't be better off if a significant fraction of that wealth was redistributed to other projects that would improve our collective welfare.


  1. My criteria for oligarchy is that the group has to be self-selecting somehow. I previously thought that Iran's Guardian Council fit that description, but apparently it doesn't. Military juntas are a common example.

    Which projects do you see as improving our collective welfare. Or if that's too open a question, which ones do you think do the most, either in absolute terms or per dollar.

  2. Hopefully Anonymous said...

    I haven't been shy about that (projects that I think improve our collective welfare), I don't think.
    My hazy intuition, grasping at a sense of the consensus of relavent experts:

    (1) countercyclical financial management in the tradition of Keynes, informed by best of breed modern expertise.
    (2) socialize health care sector.
    (3) making tax system more rational (pigovian where feasible, possibly shift to Robert E. Frank type consumption taxing from income taxing)
    (4) make housing finance more rational (perhaps on lines recommended recently by Prof. Lawrence Summers)
    (5) Make defense spending more rational, more army corps of engineers infrastructure building, less weapons sales.
    (6) Shift education spending in a rational direction to subsidize areas where shortages are anticipated and tax wasteful educational spending (where its signaling rather than competency-building)
    (7) Spend to protect against existential threats of the variety Prof. Bostrom has gone into a great deal of detail about (asteroid strikes, etc.)

    I wrote this quick but in good faith, I apologize if it's a shitty answer.

  3. Off-topic, but possibly of interest:
    John Sides on prior experience and presidential greatness.
    Josh Barro writes in defense of the establishment. I'm actually linking to someone complaining about him, which Barro summarized as "admits my thesis 'might be right' but I still suck".