Category Archives: The destruction of the middle class

Gallows Humor From Overextended Borrowers

The Housing Bubble Blog today features “YKYAAFB When….” which stands for “you know you are a fucked borrower”. And many are insightful as well as revealing: Some readers suggested a topic about how a borrower might know they are overextended. “On a thread yesterday somebody made a: ‘You know you’re a redneck when…’ joke. It […]

Class Warfare in AMT Reform Hearings

For the benefit of non-US readers, AMT stands for alternative minimum tax. When individuals take itemized deductions, they must also run an AMT calculation to see if the taxes due under that framework are higher than they’d get using income – (deductions + exemptions). The idea behind AMT originally was that high income individuals who […]

Tax Code Writing Outsourced to Tax Shelter Designers

You can’t make this stuff up. The link in the story from Washington Monthly, “‘It’s the Fox Designing the Henhouse’,” points to a New York Times article, “I.R.S. Letting Tax Lawyers Write Rules.” David Cay Johnston reports today that the IRS is outsourcing its writing of tax rules to the very lawyers and accountants who […]

Wall Street Journal Editorial Mischaracterizes AMT Woes

We’ve noted before that the Journal’s editorial pages are not the place to go if you want reality-based commentary. This piece, “Wall Street Journal AMT Editorial,” from Linda Beale on ataxingmanner (which came to our attention via Mark Thoma’s Economist’s View) dissects a recent WSJ editorial on the alternative minimum tax, or AMT. For readers […]

Does Globalization Cause Income Inequality?

Yesterday, in TCS Daily, Tim Worstall argued that income inequality (if it exists, he wasn’t quite willing to concede that) should in fact be caused by globalization. (Note that this post was featured on Harvard economics professor Greg Mankiw’s blog, which is where we came across it). It goes on to say, “Further, I’ll argue […]

The Value of Labor, or Lack Thereof

Brad DeLong may seem to be hyperventilating in this post, but he is on to something. Second Gilded Age Cultural Studies Watch, or O Michael Berube! Thou Shouldst Be Blogging in This Hour! In a Super Bowl commercial–a commercial that I thought was astonishing for a company that is in the process of a slow-motion […]

"US Middle-Class Pay Sees Slowest Growth"

A peculiar story in the Financial Times today, and I have not yet been able to locate the underlying data: Economic opportunity grew more slowly for the average American household than for either the upper or lower end of the income scale over the past two decades, according to an index compiled by Hope Street, […]

Negative Consumer Saving in 2005 and 2006

This excellent post in Barry Ritzholtz’s The Big Picture was prompted in part by Alan Abelson’s article, “Spendthrift Nation,” in today’s Barron’s. The key point is that consumers spent more than they made for two years running, 2005 and 2006. The last time this happened was in the depths of the Depression. Yesterday, DF asked […]

Macroeconomic Volatility Versus Volatility of Incomes

A bit of a mouthful, but the very important point of this Congressional Budget Office report, which was summarized in Congressional testimony and reported in Mark Thoma’s Economist’s View, is that while the growth rate of the economy has become steadier, the volatility of individual incomes has increased considerably. This income instability is another element […]

NY Fed Speech on Asset Prices and Income Disparity Under (and Mis) Reported in the US

OK, so it was only a speech by the president of the New York Fed, Tim Geithner, to the Council on Foreign Relations. But the disparity in reporting between the Financial Times, both in placement and content, and the Wall Street Journal (and to some degree Bloomberg) is striking. Not surprisingly, the WSJ downplayed the […]