Dec 13, 2011 at 11:52 am
Just wanted to make sure that anyone reading this—an interesting piece by Jason DeParle at the NYT on the cyclicality of income inequality—also sees this: a recent post of mine on the topic. In particular, note my graph at the bottom (shown here again) that asks this question:
Based on the correlation between corporate profits and the share of income going to the top 1%, should we expect inequality to have started growing again in 2010 or so?
And the answer is “yes.” The inequality data come with a lag but we have corporate profits through 2010. The tick up at the end of the figure is indicative of the point a number of commentators, myself included, make in the NYT piece. The forecast below is not at all definitive, of course—this is just a simple correlation of a complex set of relationships. But the structural forces driving inequality up remain in place.
Source: CBO, my forecast using corporate profits/GDP from NIPA.
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