Paul Krugman- Twin Peaks Planet

[n2doc]

In 2014, soaring inequality in advanced nations finally received the attention it deserved, as Thomas Piketty’s “Capital in the Twenty-First Century” became a surprise (and deserving) best seller. The usual suspects are still in well-paid denial, but, to everyone else, it is now obvious that income and wealth are more concentrated at the very top than they have been since the Gilded Age — and the trend shows no sign of letting up.

But that’s a story about developments within nations, and, therefore, incomplete. You really want to supplement Piketty-style analysis with a global view, and when you do, I’d argue, you get a better sense of the good, the bad and the potentially very ugly of the world we live in.

So let me suggest that you look at a remarkable chart of income gains around the world produced by Branko Milanovic of the City University of New York Graduate Center (which I will be joining this summer). What Mr. Milanovic shows is that income growth since the fall of the Berlin Wall has been a “twin peaks” story. Incomes have, of course, soared at the top, as the world’s elite becomes ever richer. But there have also been huge gains for what we might call the global middle — largely consisting of the rising middle classes of China and India.


And let’s be clear: Income growth in emerging nations has produced huge gains in human welfare, lifting hundreds of millions of people out of desperate poverty and giving them a chance for a better life.

Now for the bad news: Between these twin peaks — the ever-richer global elite and the rising Chinese middle class — lies what we might call the valley of despond: Incomes have grown slowly, if at all, for people around the 20th percentile of the world income distribution. Who are these people? Basically, the advanced-country working classes. And although Mr. Milanovic’s data only go up through 2008, we can be sure that this group has done even worse since then, wracked by the effects of high unemployment, stagnating wages, and austerity policies.

more
http://www.nytimes.com/2015/01/02/opinion/paul-krugman-twin-peaks-planet.html?ref=opinion&_r=1

http://krugman.blogs.nytimes.com/2015/01/01/recent-history-in-one-chart/?_r=0

[pampango]

1. Twin peaks in income gains since 1988 - top 1% and bottom 75%. I hope liberals

can figure a way to limit/redistribute the future gains of the 1% (to help the people in the 80% to 90% groups of global income) without jeopardizing the gains of the lowest 75%. I think the FDR-way of higher taxes, more regulation and better safety net still will work.

[Enthusiast]

2. As long as the party elite are guided by neo-liberal policies relief will remain a dream.

[pampango]

3. It is frustrating how liberals here don't seem to learn from the experience of liberals elsewhere

who have actually constructed societies that have excellent distributions of income, strong unions and middle classes and more effective safety nets. They have done it with progressive (and higher) taxes, legal support for unions, better corporate regulation and funding for a better safety net - and less military spending, of course.

Instead many here want to 'reinvent the wheel' and come up with an exceptionally American approach to progressive goals. And it is not working.

I think the "European model" (if you can call it that) is better at reining in the 1% without jeopardizing the gains of the bottom 70% on the global income scale.

[Enthusiast]

4. It sure is frustrating.