Liberals Can’t Read Graphs, Part 3

This research is exceedingly important. Yet, despite its overall quality and its stratospheric academic origins, it suffers from the de rigueur graphical illiteracy of modern liberalism.

Here is how the authors describe their findings in their own Executive Summary:

Wealth concentration has followed a U-shaped evolution over the last 100 years: It was high in the beginning of the twentieth century, fell from 1929 to 1978, and has continuously increased since then.

Here, meanwhile, is the author’s graph showing the wealth share of the richest 0.1% (one-tenth of one percent) of U.S. households:

Wealth Shares graph
click image for larger view

“Fell from 1929 to 1978” is an extremely peculiar way of describing the movement of that line over those years. As any child can see, the line has two declines — a minor one from 1968 to 1978, and the only major one from, of course, from 1932 to 1949, years when corporate capitalism was first dying and then under public command. From 1949 to 1968, the line is entirely flat, meaning that the richest 0.1% was maintaining its customary share of (rapidly expanding) wealth.

To conclude, as the authors do, that “there was a substantial democratisation of wealth from the Great Depression to the late 1970s” is profoundly crude, if not intentionally misleading. The supposed golden years of welfare state liberalism were exactly 1949 through 1968. But, as these authors themselves show but cannot acknowledge, wealth was not democratized one iota over that stretch!

The plain fact is that, under corporate capitalism, only systemic crisis and/or public anti-capitalist intervention ever democratize wealth. That simple fact, of course, is publicly unmentionable in our market totalitarian society, organized as it is around the thesis that the rich can never be rich enough.

Dispatch from the Commanding Heights

cards The July 12-July 18 edition of Bloomberg Business Week, a general business magazine tellingly swallowed recently by a speculator’s news wire, is running a multiply useful story on the ongoing hoarding of cash among the overclass.

Flush with more cash than they have had stashed in at least a half-century, it seems the investing stratum faces the harrowing prospects of only getting investment returns “in the low single digits” and, due to Great Depression III, is “as confused as the rest of us”* about how they’re going to escape that fate.

See?  We really are all in this together.  Doesn’t this situation sound oh so familiar, fellow Joe and Jane Sixpacks?  We have record amounts of money on hand right now, don’t we, but face the prospect that it might only grow slowly, if we just sit around and do nothing.  Right?  Thank God we don’t have classes in America!

Meanwhile, in case you were needing a confirmation straight from the horse’s mouth, this BBW article also includes a quote from a hedge fund manager on what exactly hedge funds and Wall Street brokerages do:

Max Trautman, a former Goldman Sachs proprietary trader who co-founded London-based Stoneworks Asset Management in 2006, is now paring his $460 million fund’s market exposure. “We’re trying to reduce risk by downsizing our trades,” he says. “It’s not that we have stopped taking views, but we’re just putting less risk in them.”

So… “taking views” expressed with money on “risk.”  In my house, that’s called a wager.

And this is the system that claims it is the best of all possible ways of allocating scarce resources…

*It might be suggested that not everybody is confused. Some of us, perhaps even most of us, might merely be excluded and ignored. As a reggae band named for a British unemployment benefits form once sang,

As always you were wrong again
To us a little seems a lot
Don’t turn your back on desperate men
Cause we can see how much you’ve got…