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Most discussions on inequality focus on income, and pre-tax income at that.
There is another angle on the topic:
. . . If you measure consumption inequality, it is far lower than pre-tax income inequality, because the top 40 per cent of earners pay more in than they get out, while the bottom 60 per cent get more out than they pay in. Indeed, in Britain the top 1 per cent generate about 30 per cent of the total income-tax haul. After such redistribution, the richest fifth of the population has only four times as much money to play with as the poorest fifth. . . .
This comes from a post by Matt Ridley who points out that poverty and inequality are both falling.
. . . by any conceivable measure, absolute poverty has fallen dramatically over the past few decades, so why should it matter if the rich get richer? Today’s British poor spend half as much of their income on food and clothing as in the 1950s, while working many fewer hours, living about eight years longer and having access to phones, cars, medicines and budget airlines that would have amazed even the rich in the 1950s.
Moreover, here’s a question I’m willing to bet that chimpanzees would do better than people at: given that inequality has been rising recently in China, India, America and many other countries, is global inequality rising or falling?
The answer: it’s falling and has been for several decades, however you measure it. The reason is that people in poor countries are getting richer more quickly than people in rich countries are getting better off.
That fall in global inequality has accelerated since the start of the financial crisis. As Africa now experiences record rates of growth, the number of people trying to live on $1.25 a day is plummeting fast. Mr Rosling likes to show two charts in his talks: the graph of global income was once a two-humped camel; now it’s a one-humped dromedary, with the vast majority of the world’s people in the middle.
Here’s another question that I fancy the chimps would beat the people at: did poverty and inequality in Britain increase or decrease as a result of the recession? The answer is that both fell. Inequality has fallen to levels not seen since the mid 1990s, as it usually does during recessions, though it is still higher than it was in the 1970s. Meanwhile the Left’s favourite measure of poverty — those earning less than 60 per cent of the median income — has by definition gone down, because median income has gone down. Redefining poverty in this relative (and very inadequate) way has therefore rather backfired. . .
A percentage of median income is a very blunt instrument with which to measure poverty because a fall in the incomes of higher earners will improve the measure but make absolutely no impact on the problem.
As poverty and inequality improve the differences between rich and poor become less obvious:
Imagine being told that one of the people in a meeting is a genuine billionaire (I owe this idea to Professor Don Boudreaux). How would you tell which one? His bodyguards, private jets and grouse moors are outside the room; his shirt and jeans are unlikely to give him away (as they would in 1900); his Rolex could be a cheap imitation; his teeth, girth and height are probably unremarkable (unlike in 1800); even his Diet Coke is the same as everybody else’s. Much more than in the past, most inequality in this country these days — though by no means all — is in luxuries, rather than necessities.
That helps to explain why some welfare is now directed at people who already have more than enough, though it doesn’t make it any more right.
. . . does income generally grow faster for people in the lowest fifth of the population or people in the highest? It’s the lowest, because many of those people are young, low-paid people just starting out on their careers, while many of the richest fifth are older people at the peak of their pay, about to retire. That is to say, the category “poorest fifth” may not seem to show much change, but the people in it do. Income mobility is far from dead: 80 per cent of people born in households below the poverty line escape poverty when they reach adulthood.
Mobility is very important. It’s not just how much people have which matters but the ability for those with less to get more.
But why, when both poverty and inequality are declining are both regarded as more serious issues?
None of this is meant to imply that people are wrong to resent inequality in income or wealth, or be bothered about the winner-take-all features of executive pay in recent decades. Indeed, my point is rather the reverse: to try to understand why it is that people mind so much today, when in many ways inequality is so much less acute, and absolute poverty so much less prevalent, than it was in, say, 1900 or 1950. Now that starvation and squalor are mostly avoidable, so what if somebody else has a yacht?
The short answer is that surely we always have and always will care more about relative than absolute differences. This is no surprise to evolutionary biologists. The reproductive rewards went not to the peacock with a good enough tail, but to the one with the best tail. A few thousand years ago, the bloke with one more cow than the other bloke got the girl, and it would have cut little ice to try to reassure the loser by pointing out that he had more cows than his grandfather, that they were better cows, or that he had more than enough cows to feed himself anyway. What mattered was that he had fewer cows.
For some the problem isn’t how much they have but that others have more.
If they use that to motivate themselves to improve their situation that can be good.
If it just makes them resentful and feel they’re owed more, even if they have enough, it’s merely envy.
Hat Tip: Anti Dismal
Wanaka has had a very big weekend.
The Motatapu Challenge, a rodeo and the Upper Clutha A & P Show attracted thousands.
The show is the second biggest in the South Island, combining the best of traditional attractions with some newer attractions,one of the most popular of which is the Jack Russell race.
For several years, the show has also hosted the Glammies – the Golden Lamb awards.
I haven’t been able to find the results, but I did get a photo of a couple of the judges:
Prime Minister John Key and Beef + Lamb NZ Iron Maiden Sarah Walker.
Waitaki MP Jacqui Dean always has a tent at the show – it was very busy and the mood was very positive.
Representatives of at least one other political party generally turn up in election year but there was no sign of any others this weekend.
Yet more proof their contention of caring about the regions is empty rhetoric.
Sunday’s soapbox is yours to use as you will – within the bounds of decency and absence of defamation. You’re welcome to look back or forward, discuss issues of the moment, to pontificate, ponder or point us to something of interest, to educate, elucidate or entertain, to muse, amuse or bemuse.
141 BC Liu Che, posthumously known as Emperor Wu of Han, assumed the throne over the Han Dynasty of China.
1230 AD – Bulgarian tsar Ivan Asen II defeated Theodore of Epirus in the Battle of Klokotnitsa.
1276 Augsburg became an Imperial Free City.
1500 The fleet of Pedro Alvares Cabral left Lisbon for the Indies.
1566 David Rizzio, the private secretary to Mary, Queen of Scots was murdered.
1765 After a campaign by the writer Voltaire, judges in Paris posthumously exonerated Jean Calas of murdering his son. Calas had been tortured and executed in 1762 on the charge, though his son may have actually committed suicide.
1796 Napoléon Bonaparte married his first wife, Joséphine de Beauharnais.
1841 The U.S. Supreme Court ruled that captive Africans who had seized control of the ship carrying them had been taken into slavery illegally.
1847 Mexican-American War: The first large-scale amphibious assault in U.S. history was launched in the Siege of Veracruz
1862 The USS Monitor and CSS Virginia fought to a draw in the Battle of Hampton Roads, the first fight between two ironclad warships.
1892 Vita Sackville-West, English writer and gardener, was born (d. 1962).
1896 Prime Minister Francesco Crispi resigned following the Italian defeat at the Battle of Adowa.
1910 Westmoreland County Coal Strike, involving 15,000 coal miners began.
1916 Pancho Villa led nearly 500 Mexican raiders in an attack against Columbus, New Mexico.
1918 Mickey Spillane, American writer, was born (d. 2006).
1925 Pink’s War: The first Royal Air Force operation conducted independently of the British Army or Royal Navy began.
1933 President Franklin D. Roosevelt submitted the Emergency Banking Act to the Congress, the first of his New Deal policies.
1934 Yuri Gagarin, Soviet cosmonaut and the first human in space, was born (d. 1968).
1947 Keri Hulme, New Zealand writer, was born.
1954 Bobby Sands, IRA member, was born (d. 1981).
1956 Soviet military suppressesed mass demonstrations in the Georgian SSR, reacting to Khrushchev’s de-Stalinization policy.
1956, Opononi George or Opo, also known as the ‘gay dolphin’, died.
1957 A magnitude 8.3 earthquake in the Andreanof Islands, Alaska triggered a Pacific-wide tsunami causing extensive damage to Hawaii and Oahu.
1959 The Barbie doll made its debut at the American International Toy Fair in New York.
1963 David Pogue, Technology columnist and musician, was born.
1976 – Forty-two people died in the 1976 Cavalese cable-car disaster, the worst cable-car accident to date.
1977 The Hanafi Muslim Siege: In a thirty-nine hour standoff, armed Hanafi Muslims seized three Washington, D.C., buildings, killing two and taking 149 hostage.
1990 Dr. Antonia Novello was sworn in as Surgeon General of the United States, becoming the first female and Hispanic American to serve in that position.
1991 Massive demonstrations were held against Slobodan Milošević in Belgrade. Two people were killed.
1997 Observers in China, Mongolia and eastern Siberia were treated to a rare double feature as an eclipse permitted Comet Hale-Bopp to be seen during the day.
2010 – The first same-sex marriages in Washington, D.C., took place.
2011 – Space Shuttle Discovery made its final landing after 39 flights.
2012 – Polish mountaineers Adam Bielecki and Janusz Gołąb make the first winter ascent of Gasherbrum I.
Sourced from NZ History Online & Wikipedia
Piquant - having a pleasantly sharp taste or appetizing flavour; agreeably stimulating, interesting, or attractive; sharp, pointed object; spec. a hedgehog spine.
National’s Napier electorate has selected Hawkes Bay Chamber of Commerce Chief Executive Wayne Walford as its candidate to replace retiring MP Chris Tremain.
“Wayne has a great understanding of communities across Napier and Wairoa. He has the full support of myself and the National Party to run a strong campaign for the seat this year,” says retiring MP Chris Tremain.
Mr Walford says he is proud to have been selected and will be working hard to keep Napier’s strong voice in John Key’s National Party.
“The Government has delivered real results for the Hawkes Bay, and strong local representation in John Key’s National Party has been critical to getting some major local projects over the line,” says Mr Walford.
“These include the expressway redevelopment and Napier-Wairoa Road upgrade to name just a few.
“I’ll be working hard to win the confidence of the electorate to keep that strong voice and continue delivering jobs and growth for Napier, Wairoa, and the Bay.”
Wayne Walford – Biographical Notes
Of Ngati Porou descent, Wayne Walford was raised in the Hawke’s Bay and lives in Napier with wife Joan.
As Chief Executive Officer of the Hawkes Bay Chamber of Commerce, Wayne brings a track record of advocacy and leadership, and a focus on jobs and growth.
He holds a Masters in Business Administration and a Post Graduate Diploma in Business Studies from the University of Waikato, and a Diploma in Business Studies from Massey University.
This is the second National selection this weekend and again the members have chosen a strong candidate.