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Quote of the Day: October 6, 2011: Consequences of the Death of Flavius Aetius

Income and Wealth Inequality: We Answer Your Questions

A question I was just asked:

Is income or wealth inequality greater today between a David Koch, Michael Bloomberg etc vs the median household compared to the Gilded Age of Rockefeller and Morgan?

My answer:

The right person to answer this is six doors to the north: Emmanuel Saez…

My view: right now it is a tossup. Any differences in relative inequality on either the income or wealth dimension are small, and I am not sure which way they go.

A few additional points:

First, because the economy was smaller back then--fewer people--John D. Rockefeller, Andrew Carnegie, J.P. Morgan, and company were more powerful in the country than any three men were back then. But the wealth and the income of the top 0.001% (and the top 1%) back then looks to have been about the same multiple of the income of the average guy as it is today.

Second, right-wingers will say that poverty was worse back then than relative poverty is today because today's poor have cell phones, teevees, and microwaves and because the poor back then suffered serious biomedical insults.

Third, right-wingers will say that even though the relative income and wealth gaps are about the same that the lifestyle gap between rich and poor is much less than it was back then--nearly everybody today can afford to overeat to their heart's content and watch Hamlet when they choose, while a century ago only the rich could afford to overeat or watch Hamlet. I am not sure what I think of these arguments.