On Fri, 6 Sep 2013 09:07:50 -0700 (PDT), "
wrote:
On Friday, September 6, 2013 9:47:00 AM UTC-4, Ed Huntress wrote:
So I thought the topic was about whether a hgh or low Gini number made a difference.
It is. But you can read what he said either way. Here's what he said:
And yet you seem not to be concerned with the general case, but instead only want to discuss the U.S. economy.
That's what we were talking about -- the rising income disparities in
the US, and the implications of IMF and other research from other
countries for the US economy.
There isn't much to be applied to the US, from the experience of a
relatively poor economy where over 50% of the workers are involved in
farming.
So you are trying to restrict the discussion to a single country instead of discussing the general case. So cherry picking the data.
I'm not tryint to "restrict" anything. I'm talking about the subject
we were discussing.
Now I am really confused. First you say the subject is about whether a hgh or low Gini number made a difference. And then you say it is only about the U.S. economy related to the Gini number. You need to be less parochial. If the Gini number makes a difference it ought to make a difference regardless of the country. If it is country dependent then there must be other factors involved.
Dan
Let's try to clarify it, then. A GINI coefficient, by itself, doesn't
tell you much. I agreed to that point several messages ago in this
thread. As a raw number, divorced from historical trends and the
structure of particular economies, its implications are ambiguous.
But a rising GINI coefficient can be an indicator of an economy's and
a society's decling functionality and potential for growth.
It's a complex and nuanced subject. For the current thinking among
economists and some of the latest research, that Special Report I
linked to tells the broad picture and where the current agreements and
disagreements lie:
http://www.economist.com/node/21564414
If you don't want to go look at that, here's the part that George and
I have been talking about
:
=============================================
And in today’s sluggish economies, more inequality often means that
people at the bottom and even in the middle of the income distribution
are falling behind not just in relative but also in absolute terms...
....The mainstream consensus has long been that a growing economy
raises all boats, to much better effect than incentive-dulling
redistribution. Robert Lucas, a Nobel prize-winner, epitomised the
orthodoxy when he wrote in 2003 that “of the tendencies that are
harmful to sound economics, the most seductive and…poisonous is to
focus on questions of distribution.”
But now the economics establishment has become concerned about who
gets what. Research by economists at the IMF suggests that income
inequality slows growth, causes financial crises and weakens demand.
In a recent report the Asian Development Bank argued that if emerging
Asia’s income distribution had not worsened over the past 20 years,
the region’s rapid growth would have lifted an extra 240m people out
of extreme poverty. More controversial studies purport to link
widening income gaps with all manner of ills, from obesity to suicide.
The widening gaps within many countries are beginning to worry even
the plutocrats. A survey for the World Economic Forum meeting at Davos
pointed to inequality as the most pressing problem of the coming
decade (alongside fiscal imbalances). In all sections of society,
there is growing agreement that the world is becoming more unequal,
and that today’s disparities and their likely trajectory are
dangerous.
=============================================
There are a few ways in which a rising GINI can be good. There are
more ways that it can be bad. In our case, it reflects a hollowing out
of the middle class.
Comparing our GINI to that of a country where 50% of the workers are
engaged in farming, like Albania, tells you nothing much, except that
GINI numbers are only useful indicators in terms of trends, and of
comparisons between countries at similar stages of development.
--
Ed Huntress