On 17 Dec 2012, at 22:41, Roger Clough wrote:

To try to clear up my mistaken interpretation of the gini coefficient,
namely that USA inequality is not decreasing, it is actually increasing,
I  find that the per capita wealth is also increasing, so
let's see what effect that will have.

Although the fairness index (gini coefficient) has
grown linearly with time in the USA,
:
<USA gini_index.jpg>


The real per capital wealth has also increased, but exponentially:
(Real means inflation-adjusted)
:
<USA-per-capita-gdp-1790-2005.png>

By eyeball, it looks as though the real per person income GDP increased over the range of the time duration of the gini coefficient growth by about 5/1.5 ~ 3.3 .. The gini coefficient only increased from .4 to .47 or is about 1.17 times larger, or is essentially constant in comparison with the growth in real GDP by a factor of 3.3. So I would say that everybody- the poor as well as the wealthy-- is getting appreciably richer, even
though there has been a minimal increase in wealth inequality.

The growth rate is not within our control. The questiion then is whether or not the gini coefficient is in control of the growth rate. If not, then
the debate on taxation ends there.

But if the gini coefficient can actually change the growth rate, artificially lowering the gini coefficient by increased taxation of the rich (redistributing the income)
hurts the growth rate, so we all get poorer.  Actually, a lot poorer.
The data above shows that decreasing the gini coefficient a small
amount will produce a much larger decrease in the per capita GDP,
because the latter decreases exponentially with a linear decrease in
the gini coefficient.

So, in either case, taxing the wealthy can do no good.

I think you are right. But we have to defend the individuals against corporatism, clubism, clientelism, special interest, etc.

Money should not been used to make money based on lies. Press should be more diverse, and banks better regulated, etc. The powers should be better separated, and some domain should be out of the political, like religion and health, food, sports, etc.

As long as drugs are not legal, I will not trust a politician (unless he says so). Being against drugs means being brainwashing, or being brainwashed, or both.

Bruno


















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