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Sunday, November 6, 2011

The top 0.1%

Just noticed Paul Krugman's recent column, in which he suggests that OWS has set the bar too low, by focusing on the top 1% instead of the top 0.1%.  I don't think so. 

Here's what he says:

"If anything, the protesters are setting the cutoff too low. The recent budget office report doesn’t look inside the top 1 percent, but an earlier report, which only went up to 2005, found that almost two-thirds of the rising share of the top percentile in income actually went to the top 0.1 percent — the richest thousandth of Americans, who saw their real incomes rise more than 400 percent over the period from 1979 to 2005.
Who’s in that top 0.1 percent? Are they heroic entrepreneurs creating jobs? No, for the most part, they’re corporate executives. Recent research shows that around 60 percent of the top 0.1 percent either are executives in nonfinancial companies or make their money in finance, i.e., Wall Street broadly defined. Add in lawyers and people in real estate, and we’re talking about more than 70 percent of the lucky one-thousandth."

So this gives us some more rough statistics:

Top 0.1% (by income)
 
60%: "executives in nonfinancial companies or make their money in finance"
10%: lawyers and people in real estate
30%: who knows?

This actually isn't all that different from what we saw before, where 31% were probably the same non-financial executives, and 14% were in finance, for a total of 45% in the "class" that is now 60%.  Lawyers still seem to command about the same share, although we don't know what kind of lawyers we're talking about.  No info on doctors.  Krugman also doesn't tell us what the "floor" for the top 0.1% is, so we can't try to translate that to an hourly rate.

He makes essentially the same point about this group that I made about the 1% -- very few of them seem to be job creators.  Presumably, some percentage of the top 1% or top 0.1% are people who have created jobs.  How hard can it be to determine who those people are, what their incomes are, how many jobs they have created, and what percent of the top 1% or (0.1%) they make up?  If someone would just do that, we could probably figure out a way to give THAT class of useful citizens incentives to keep doing what they are doing, while allowing us to tax the rest of the 1% (or 0.1%) that are more parasitical than productive.

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