KRUGMAN: "A Mind Is A Terrible Thing To Lose"

[kpete]

November 2, 2011, 4:18 PM
A Mind Is A Terrible Thing To Lose

OK, I see that some people are doubling down on the claim that rising inequality is all about education — when what the CBO report drives home is that this is all wrong, the big increase has come from gains at the very top. I have to admit that I have a sneaking suspicion that this is in part driven by KDS (DS for derangement syndrome): some people will rush to take a position precisely because I have debunked it. But anyway, it’s really, really wrong.

Here’s the CBO result:

Notice that the 81-99 percentiles have seen only modest gains; it’s really the top 1 percent that drives the story.

................

................. College graduates have made only modest gains, and basically nothing after 2000; even advanced degrees weren’t giving anything like the gains we see for the top 1 percent (and the much bigger gains of the top 0.1 percent).

Yes, college grads have done better than non; but inequality in America is mainly a story about a small elite pulling away from everyone else, including ordinary college grads. And we’ve know this for a long time! There is no excuse for getting it wrong.

http://krugman.blogs.nytimes.com/2011/11/02/a-mind-is-a-terrible-thing-to-lose/

[sam11111]

1. "more for the boss means less for you".. no matter what your education. Dollar a day is Boss's goal

for every last one of you.

That maximizes his obscene luxuries.

Only unions have ever limited his grabbing. Join or start one today.

[dtexdem]

2. This shows the real problem: we need super-advanced degrees.

Even Ph.D.s don't show expected gains, so we need something more. And we obviously cannot trust the universities on this -- after all, they have made the Ph.D. the "terminal degree." And no, even offering post-docs doesn't get them off the hook. No, what we obviously need are super-advanced degrees offered by Wall Street.

;-)

[lonestarnot]

3. Credentialed thievery.

[Bandit]

4. And the problem is it probably can not be fixed, it is a run away train

Just like Global Warming... Everything that changes just causes escalation of more Change....The extremely wealthy have so much money it can not be spent in their life time and will just keep generating more money, all by itself, with no thought given to it....Increasing taxes on them by a paltry four percent won't change their accumulation of the wealth one iota..They are going to continue their accumulation at a greater rate every single year...

[KitSileya]

8. Correction: It is not 'cannot', but 'does not have the stomach to'

People don't like thinking about having to drag out the guillotine again, or actually killing for justice, because it will mean so many deaths on our side. Many, many more deaths among the poor than we, who actually believe that life is sacred, are willing to sacrifice.

[a simple pattern]

9. But if they have it all

it ain't worth so much to the rest of us...

[MisterP]

10. and of course money doesn't "make" money, it extracts it from the firms and their employees

[Bandit]

11. Put a million dollars in a CD and sit back and watch whether it makes money or not..

:shrug:

[MisterP]

13. I'm not saying the value doesn't increase, but that the value "comes from" somewhere--

that's why they're called the "rentier class"

[FiveGoodMen]

14. I doesn't make money, it entitles the holder to take some of the profits

from someone else's labor.

[SharonAnn]

15. It only makes money of someone, somewhere, performs "labor" using it.

IF there were plenty of land but no labor, we'd starve.

If there were plenty of gold mines but no miners to "labor" in the mines and refine the gold, it would be worth nothing.

If I had plenty of money, I couldn't eat it. But I could use it to pay someone to do some "labor" to grow food.

Labor is the source of all wealth. Really. Labor can actually create capital.

[JDPriestly]

12. It can be fixed -- with a VAT that makes imports as expensive as

domestic goods.

The VAT would be placed on all goods, not specifically on imports.

It would REPLACE the loss in taxes like payroll taxes, income taxes and other taxes that are the result of the low wages and rampant unemployment that our free trade economy has caused. These taxes would still be taken out of the paychecks of those lucky enough to work but reimbursed at tax time. At this time, these taxes on working Americans and American companies are responsible for the "uncompetitive cost" of our domestic goods.

I saw this working in Austria and Germany.

The talk about the horrible state of the European economies is not the case in a country like Germany which, small as it is, is second only to China in the value of its exports.

Make those who profit from importing cheap goods and the loss of American jobs and incomes pay the taxes. Reimburse lower income people, the unemployed, the elderly and others who will pay the VAT but who lose their jobs due to the outsourcing and importing.

[RaleighNCDUer]

5. At my place of work we have PhDs clamoring to do volunteer work,

just so they can get a foot in the door. They aren't deciding between offers - they are wearing out their shoe leather (figuratively speaking). We have people with doctorates working for 35k, and college grads working for free.

[Uncle Joe]

6. Kicked and recommended.

Thanks for the thread, kpete.

[libinnyandia]

7. Krugman knows his stuff,

I wish more people would listen to him and other like him than filmmakers and former third party candidates.

[MedleyMisty]

16. My mother may have been mad when I left college after just one semester

But it was the best thing that ever happened to me.

My husband also left - we met during that one semester, and we washed out together. I did end up getting a two year associate's degree after that - which while my current job has nothing to do with that degree, it may have helped a bit. Of course, what really helped was that I took the SAT in 7th grade and qualified for Duke's Talent Identification Program, and the company owner's son had also gone to TIP so he knew what it meant when he saw it on my resume.

Anyway - because of our lack of student debt, we were able to buy a house a few years ago.

And personally I feel that the internet, the local libraries, the local used bookstore and what esoteric nonfiction I have been able to scavenge from the corporate bookstores have taught me much much more than an authoritarian mainstream corporate slave training college ever could.

[econoclast]

17. Better, more informative graph here

It seems clear from this presentation by Piketty/Saez ( hat tip to krispos42 ) that there are three discrete turning points. (1.) The income growth of the 99% peaked around 1972/73 After that it declined until around 1982 (2.) when the decline stopped and a very slow increase began.

(3.) The 1% 's dramatic increase also began around 1982. 

The real impact on income increases for the 99% then seems to stem from the decade prior to 1982. Fron about 1972. For the 99% this is the clear turning point! Care to propose what caused this clear trend change in 1972/73 Oil shock? End of Bretton Woods? 

We can rail against RR all we want, but the data clearly indicate that something else happened that caused the wheels to come off income growth for the 99% in the decade prior.

This is where our attention needs to be focused. If we fail to understand how and why something broke, how will we ever fix it?!?

[glowing]

18. i would agree. after Bush, the economy worked for the top only

[quaker bill]

19. Education

Based on the statistics I have read, the education achievement in regard to HS diplomas through advanced college degrees has never been higher in the US population. There is no evidence that education is even a modest part of the solution to this problem. There are tons of degreed people waiting tables and selling shoes, and a fair ration more unemployed entirely.

A college degree may very well help you, having one helped me alot. This personal experience should be taken for what it is. Some folks with the right education and the accident of opportunity do make fair advantage of it. Some people win the lottery or become NBA stars too. There is a difference between what may prove good for one, and a well considered social policy for a nation. The fact that some people do well with college degrees does not mean that we will all do better if everyone has one.