The Best of CBPP Graphs: Guideposts on the Road Back to Factville

December 29th, 2011 at 2:03 pm

My CBPP colleagues contributed many important graphics to the debates of 2011 in lots of different areas, including fiscal, poverty, inequality, health care, and more.  But which ones to highlight in this end-of-year look back at the best of 2011?  I generally used a market test: these are the ones that were most widely circulated.

Tiny bits of commentary where necessary, though more importantly, I’ve tried to provide links to the underlying docs.

Arm yourselves with the knowledge herein, and you’ll be immune to the fact-free hand-waving that too often passes for debate these daze.  Think of them not as wonky graphs, but as guideposts on the road back to the land where facts matter.

#1: A look at which income group reap the benefits of most of the growth in recent years (see here for much more on this; income changes in the figure are adjusted for inflation).

 

#2: The international dimension to the inequality picture.

#3: Yes, it’s true-compared to others, the US is a low tax country.


 

#4: And those at the top of the wealth scale have seen a much reduced tax burden as a share of their income.

#5: This one is invaluable in those incessant discussions about how higher tax rates will kill jobs and growth.

#6: Probably one of the most circulated of all this year, this one makes essential points about the actual sources of the growth in the budget deficit.

#7: You didn’t expect us to do the above for the deficit and not for the debt??!!

#8: Again, a big market test performer.  This one provides a simple but essential look about where Rep Ryan’s budget (now the House R’s budget) goes for its deficit savings.  And remember, this budget had no new tax revenues–to the contrary, it included hundreds of billions in tax cuts for the wealthiest householders, paid for in part by the cuts you see here.

#9: You can’t emphasize this point enough: health care spending grows faster in the private than in the public sector.  It’s just not a normal good, friends, and market solutions, like “everybody get out there and shop for the best deal,” are not a magic bullet.

#10: The actual impact of Rep Ryan proposal to change Medicare from a guaranteed benefit to a premium support program, where the support significantly lags actual costs.

#11: This one is especially important in debates where people make the demonstrably erroneous claim that our poverty programs don’t work.

 

#12: This one clearly shows just what a lost decade the 2000s have been for the middle class–it’s not just a Great Recession story–they were squeezed well before that.  And note the stark contrast with the 1990s.  Middle class incomes fell in real terms in the early 1990s recession, but when the recovery took hold, the middle class got a real piece of the action, something that very conspicuosuly didn’t occur in the 2000s.

 

There you have it, OTE’ers: 12 of our best from last year.  And a big hat tip to Edward Bremner, the artiste behind much of what you see above.

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34 comments in reply to "The Best of CBPP Graphs: Guideposts on the Road Back to Factville"

  1. Fred Donaldson says:

    All candidates for public office should be strapped in a chair and forced to view each of these charts for ten minutes.

    A special chair should be reserved for “Summers and Rubin” to take their turn with a narrator reviewing the numbers at 120 decibels. Paul Ayn Ryan should not get a chair, but instead be forced to read the charts standing and leaning far forward.

    P.S. Does anyone know whether “Summers and Rubin” is a comedy team or a sandwich?


  2. cat says:

    Almost all of your href tags between #3 and #11 have an “o” in front of the “http” so they are all broken.


  3. clarence swinney says:

    CANCEL THAT ONE

    10% OWN 70% NET WEALTH
    70% OWN 15%
    10% OWN 0

    10% OWN 70% FINANCIAL WEALTH
    70% OWN 7%
    10% OWN 0


  4. fausto412 says:

    Great stuff…now send it to the sellouts at Politifact and tell them to use it for their 2012 lie of the year.


  5. David R says:

    Excellent, just plain old excellent.

    The information is fantastic and the presentation is first rate.

    Thanks


  6. CG says:

    Can we get chart #1 adjusted for inflation? Would make the point even stronger (ie NOTHING has trickled down)


    • Jared Bernstein says:

      It is in real, inflation adjusted dollars–which it should say, but doesn’t. I’ll try to fix.


      • pjr says:

        I have liked that first chart but it helps me to put the numbers into perspective by recalling that real GDP/capita grew more than all of those lines, excepting the line for the top 1%. Thus, that 65% growth for the “next 19 percent” is unimpressive. (It’s even less impressive when I consider that some of the growth derives from an increase households with two income earners.)


      • CG says:

        Ah, thanks!


    • Michael says:

      Jared is an honest economist, so he is incapable of posting a chart that is not adjusted for inflation.


  7. Steve-Oh says:

    What too many Democrats/Liberals/Progressives/semi-socialists fail to understand, is that our economy is currently stuck and going to get MUCH worse, unless it is ‘freed up’, by MANY measures (certainly not govt control of the health-care system and more, bigger govt), such as total all-out domestic energy production, etc……..but one thing that WON’T help our economy is increasing taxes for anyone.
    You economic-libs NEVER explain how increasing taxes will help create jobs. NEVER. All you do is show that there were times in prior decades when tax rates for the ‘rich’ were higher, and sometimes the economy still powered ahead nicely. Dudes, correlation does not imply causation. But let’s stick to NOW — and higher taxes will NOT create more jobs. Will not and cannot. We’re in serious trouble w/ 15T fed debt and adding $1.5T/year to it. $1.5T each year is a mammoth annual deficit — it’s this size: $30k/year to 50M people, or $20K to 75M people. And it’s NOT sustainable. NOT. And Democrats REFUSE to reduce federal spending. This will NOT end well, and you idiots keep chirping in the background ‘raise taxes on the rich, raise taxes on the rich, raise taxes on the rich’. You’re like spoiled petulant little children who do NOT see the big picture. And Obama loves it because it’s his ONLY tactic to win the election in 2012. He’s so glad to have you all helping his cause. Meanwhile, what have been his ‘answers’ to increasing employment in the country? Govt. Just like FDR’s — both have failed. The Depression didn’t end until FDR died and Truman announced more business-friendly regulatory environment to the country. The fed spending did not help the horrendous private sector unemployment — after six years, Morgenthau announced ‘it has not worked’. And it’s not working now. But, still……what’s your answer? Raising Taxes. How will that help the private sector create jobs? You people NEVER answer that.


    • Jill SH says:

      Let me take a stab at this.

      Right now big corporations are making record profits and sitting on lots of cash. Seems to me that they could at least pay their current employees more. Those employees might very well spend that extra cash and insert more demand into the economy. But big corporations don’t seem to be doing that.

      Now, as for the government creating jobs? Well, let’s look at the huge military-industrial complex that survives/thrives on government outlays, or more benignly, the aero-space industry. A lot of private companies make a dam-good living off those government contracts. Or how about bridges and road — you know, all that infrastructure stuff? My state pays a lot of private contractors to do that work with revenues from gas taxes. (In my home state NH, where we haven’t raised the gas tax in 20 years, our number of red-lined bridges has ballooned.)

      I just came back from spending the holiday with family in Maryland. Let me tell you that the economy in the greater Baltimore-Washington DC area is booming (relatively). A huge hunk of people are in government-related businesses.

      You see, taxes pay for stuff. And a lot of PRIVATE businesses earn those contracts and spend that money hiring workers.

      And then ya’ know what? All those newly employed won’t be trying to subsist on unemployment, and would be paying taxes to help pay off the deficit!


    • Michael says:

      “You economic-libs NEVER explain how increasing taxes will help create jobs. NEVER. All you do is show that there were times in prior decades when tax rates for the ‘rich’ were higher, and sometimes the economy still powered ahead nicely. Dudes, correlation does not imply causation.”

      No, but it is correlation. The conservative claim is that taxes kill the economy. That claim is a lie, because the claimed mechanisms obviously do not exist.


      • jerkyEd says:

        None of the economic-libs I know and read claim tax increases will help create jobs. It is that tax cuts will cost more jobs! It is the economic-cons who are hell-bent on balancing federal budgets that would be best served by tax increases.


      • Robert says:

        If you take the point to its limits anyone can see that high taxation kills jobs. I doubt you need to be told explicitly.


    • Paleo says:

      Wow! 315 words of pure speculation unhinged from reality. I could distill that down to two words unhinged from reality – “republican economics.”


    • jerkyEd says:

      What else happened at about the time FDR passed and Truman’s first years as President? Any guesses????
      Funny how FDR haters cherry-pick their lessons from history.


  8. Jill SH says:

    BTW, JB and especially Edward Bremner: Thank you for these. As a graphic designer/graph and chart builder myself, I really appreciate this collection. It’s getting its own bookmark.

    Will come in handy with that Fox-watching brother-in-law and a cousin. I’m trying to work up the gumption to send them a link.


  9. Michael says:

    What visualization program was used to create these graphs?


  10. Fred Donaldson says:

    This Forbes article explains how Germans produce TWICE as many cars as the U.S. and their workers earn TWICE as much:

    http://www.forbes.com/sites/frederickallen/2011/12/21/germany-builds-twice-as-many-cars-as-the-u-s-while-paying-its-auto-workers-twice-as-much/

    We are in a race to the bottom, as union after union agrees to lower wages for new hires, as much as $15 less than current workers.


  11. Fred Donaldson says:

    A link to the original article on income inequality, which includes examination of how German companies in U.S. pay far lower wages than in Germany, basically because they can get away with it.

    http://www.remappingdebate.org/article/tale-two-systems


    • Paul says:

      Where do I start?
      Hmm…. currently most German and French banks are in a bad place. They have loaned money to other countries (Greece, Spain, etc.) and citizens in those countries that can now no longer pay their debts. In addition, since the Euro was all one currency, Greece borrowed money from other places are far too low a rate (Since Germany was using the same currency, the rate was closer to Germany’s than what Greece’s economic prospects indicated).

      Essentially this is a form of mercantilism. Germany has enjoyed extremely high GDP/growth/wages for the last 15 years thanks to the Euro. But now the bill is due. Greece, Portugal, Italy, Belgium, Ireland, and Spain are basically insolvent/bankrupt. If Greece defaults (which they almost have to – that or live in abject poverty for a generation or two as slaves to the German bankers), then the euro tanks, then half the banks in Germany and France fail, then badness happens and we’ll see how good Germany’s economy looks then.

      Without the artificial purchasing power granted to southern europe to buy northern european goods, the numbers cited in the article would never have happened. (The proof that this was artificial is the simple fact that southern europe can’t pay their bills. )

      Similarly, attempting to compare numbers between various countries (like #3, etc.) is problematic without figuring out how to deal with structural differences in the economies. For example: A huge percentage of Norway’s wealth is derived from north sea oil production. How big? by one estimate, 25% of norway GDP is from oil. For comparison, about 3% of the United States GDP is from oil. Can you really compare those economies? Not with the simplistic numbers shown above, IMO.

      #9 – Since the government arbitrarily sets the amount they will reimburse for various medical procedures under medicare, any attempt to claim it is more efficient is self-serving. “See, we reduced how much we spent because by law we can set the rate and make the doctor accept it.” Problem: more and more doctors are opting out of medicare for the simple reason that they can’t afford to be in it. When medicare reimbursements increase by 0 to 2%, but rent, electricity, supplies, labor, etc., increase by 1 to 5%, it doesn’t take a rocket scientist to realize that at some point, you can’t afford to help the old people any more.

      etc.
      etc.


  12. Bumpa says:

    Thank you, thank you, thank you! Going to m’ brother-in-laws for New Years along with several of the family who are convinced that their conservativel views are inspired by the gods (they still worship at the alter of Reagan). These graphs will be used to educate the uneducated.


  13. Steve W from Ford says:

    Same old tired leftist talking points. I find these charts, as given, to be nearly meaningless. I’ll give a few examples.
    #1: Incomes vary widely from year to year particularly for the self employed that make up the bulk of “the rich”. It is not uncommon for self employed people to spend years building up a business while having a very low AGI and then to have an event that monetizes the value built up over many years and for that one or two year period find themselves “rich”. If you want to see whether there really is an increase in income inequality one would need to average out incomes for the same earners over some large number of years and then compare. This apparent increase is more likely an artifact of increased entrepreneurship in the US over the last half century. Secondly in my experience the majority of the bottom 2 quintiles in earners have significant income that never shows up in government surveys. This is the reason spending by “the poor” is so much higher than “income” would allow.

    #2. The years picked to compare are interesting as 1990 was near the bottom of a recession while 2007 was near the top of the Bush boomlet. High income earners see a greater fall off of income during recessions and a larger surge during booms. Secondly increasing value in a knowledge economy ( which is what we all want after all) falls disproportionately to those who increase this knowledge. Increased entrepreneurship also impacts this greatly. No way to change this without killing the goose that is laying the golden egg. Third see reason (above) chart one is bogus. Same applies here as well.

    #3. And this is a bad thing?? You actually want to imply we should be more like the EU which makes up the first 13 spots on the high tax list? How well, exactly, is that working out right now.

    #4. If you dug into this you would find that the very wealthiest garner most of their income from cap gains which is why the current 15% cap gains rate feeds over into almost the same rate for the wealthiest Americans. This gives credence to my point about many of “the rich” only having high incomes for a rather limited time as they sell accumulated properties and reap cap gains over a short period of time. If you want to argue that higher cap gains rates will boost capital formation and so increase national wealth, have at it.

    Have to take my wife to lunch so can’t finish the rest but most are even more flawed, IMHO.


    • R says:

      This is kind of a ridiculous pseudo-scientific response. So, without further ado:
      This is most decidedly untrue. This is not the case of some entrepreneur scrimping and saving and then one year “monetizing” it and then going back to begging in the street. That is absurd. Here, we can see that almost 70% of the top 1% are in managerial, white-collar or otherwise professional workers (http://money.cnn.com/2011/10/20/news/economy/occupy_wall_street_income/index.htm). You could argue that lawyers and medical professionals are “entrepreneurs”, but most really aren’t. Also, from a guy who I really don’t like, but his stats I do believe are true (http://www.nationalreview.com/articles/282503/who-s-top-1-percent-thomas-sowell?pg=2), we have an analysis that tracks income over time of the same taxpayers, so the top 1% in 1995 made 25% LESS in 2005. Pretty big huh? So they went from making ~350K to 260K. Boo hoo.

      Oh and the lower quintiles have outspent their income on CREDIT, which is what accounts for that (not some black market economy blather you’re touting – do you think all poor people sell drugs?). You can argue that’s their fault, but much more likely that they were spending on credit for basic necessities (e.g., education, medical attention) that had increasingly become out of their reach.

      Anyways. Not enough time to do it all, but, irony aside, this is all the same tired right-republican talking points.


      • Robert says:

        There’s a reason why the right uses the same arguments over and over. I wonder what it could be. And sympathy isn’t the best determiner of who should get what. I;m sure your sympathies lie in different places than say Malcom X’s. Ghandi’s, Your mom’s. So Boo Hoo isnt the best of policy drivers.


    • Robert says:

      Interesting Stuff. Hope you and your wife enjoyed the lunch


  14. Mike says:

    Looking at the last charts, it appears NAFTA and outsourcing are the biggest driver of pay reduction and the subsequent issues not the tax hikes or cuts. This makes sense, since if the US outsourced 85% of industrial production to Asia, India, Mexico, etc, this would be a strong effect.

    So I say that NAFTA was the root cause of most of the loss of pay, and no tax hike or cut can overcome the loss of over 20 Million, Low, Med, and High Tech job losses. Put another way, Millions working at Wall Mart and Flipping Burgers is going to improve our standard of living.


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