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This is by far the stupidest question on economics (unless it is intended to see how someone responds to a stupid question, but knowing this account, he is serious) I have heard this season. It is based on an ignorant understanding of a faulty premise. Allow me to explain. 1/
Oh, where to begin? There is so much economic ignorance, stupidity, and deception baked in those two tweets. First, the implied deception in the graphic, i.e. the rich got richer, and the poor got poorer. That's what is implied, but that is a completely asinine interpretation. 2/
Some people got richer and some got poorer (always happens in any period of time), but that is irrelevant, because the graphic isn't tracking the same people. The graphic only tells us that top 1% were richer than top 1% 30 years earlier -- two different groups of people. 3/
As long as national economy keeps growing (which is a good thing), this graphic will always show top 1% at any point in time will be far richer than the top 1% 30 years ago. This is an ever green graphic which is representative of how math works in growth economies. 4/
I challenge the producers of this graphic to show me any country in the world which is not a socialist hellhole for which the same graph doesn't show the same thing. This graph only tells us that a free market economy grew over the last 30 years. Nothing more, nothing less. 5/
Now about the bottom 50%. Change that 50% to 49% and that $900B differential will miraculously vanish. The reason is very simple: the total net worth of roughly one-half of Americans (sorted by point-in-time net worth) is always close to zero. 6/
That again tells us absolutely nothing about the economy or wealth distribution or poverty or any of the things people try to read into it for political reasons. It only tells us something about how math works. 7/
Roughly half of Americans have enough debt (mostly mortgage debt) that when subtracted from the value of their assets makes their net worth close to zero. 8/
It doesn't mean they are poor. Just think about all the professionals (doctors, lawyers, accountants, et al) in their early thirties. I bet most of them start out in their careers with zero or negative net worth. 9/
That doesn't mean there aren't really poor people out there. Of course there are. Also, transient poverty in any country is not a bad thing. Sticky and generational poverty is what is horrible and that is the kind of poverty we need to focus on lifting people out of. 10/
The trouble is this graphic and this statistic about bottom 50% tells us absolutely nothing that is useful in any meaningful way. This is a barren mathematical number with no soul or purpose other than crass political exploitation of the ignorant and the deranged. 11/
The fact that prominent liberals obsess over this graphic and spend time formulating questions for their presidential candidates based on it makes me profoundly sad about the depth of their economic ignorance and the viciousness of consequences that might ensue from it.
The End
The End
