Inequality begets inequality, according to the Economic Report of the President

On a warm evening last spring I found myself at a dinner party in the lush suburbs of a small Ivy League town not far from New York City.

The main concern of a fellow economist was the trouble his son was having raising his new family: that would be the son living in Manhattan, the one making $10 million a year.

It appears there is a bidding war for spaces in good kindergartens and, as we all know, prices skyrocket when demand outstrips supply.

And demand has been rising. We also know that.

So the most striking claim in the Economic Report of the President for 2012 is not that the share of earnings accruing to the top 1%—a share that was about 8% during the early 1980s—stands at close to 20%. After all, this is old news, the stuff of Occupy Wall Street.

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