So, since around 1998, I've been focused on two coming apocalypses: the economic collapse and the global climate catastrophe. The former is nigh upon us, but the latter may still be up to 20 years away -- anyway, it's not immminent, and I sometimes have hope that we may have a Manhattan island throughout my lifetime. Or, not to mortally jinx myself, throughout my actuarially predicted lifetime. That's a digression.
My approach to the former problem was to start credentialing myself as a high-income worker and hob-nob with the wealthy and powerful. This, then, is pretty validating:
EMMANUEL SAEZ[, the income-share expert and economics professor at the University of California, Berkeley]: Perhaps the best comparison is the Great Depression. During that period, the income share of the top 10% was stable. But that masked a sharp fall for the top 1%. The income share of the top 1% fell from 24% in 1928 to 15.5% in 1931.
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[It was such a big drop] [m]ostly because capital gains took a big hit, and I think it will in the coming years as well. One of the most important (factors) during the Great Depression was that profits to business took a huge hit. That affected the top 1%, but the top 10 % as a whole remained stable because the high-wage earners did pretty well during the Great Depression. Those guys rarely lose their jobs and don’t get much of a pay cut.
4 comments:
Wow, that is really interesting.
But the depression lasted one decade, two if you include the following global upheaval.
Peak oil, is, well, like a 5-studded ring of diamonds set in white gold, forever. Ending the analogy there, maybe the top 10% stay in the top 10% (someone has to), but the value of that echelon steadily declines? Surely some of that happened in the depression didn't it?
Thank you for your comment, and your fascinating choice of analogue. Unlike Emmanuel Sanz, I'm not an expert in the Depression, so I don't know much outside of that article, which says the top 1 %'s share of incomes dropped and their wealth "dropped dramatically, too," but doesn't compare the changes.
I wanted to clarify something else, though. I've been preoccupied with catastrophic climate change since 1991. My plan there was to become a climate scientist, but -- and meaning no offense to those who did -- it became despondencigenically apparent that we had plenty of Science, just no action. It's the economic collapse that I added to my worries (for, if you keeping score at home, a grand total of two) in 1998.
Well, that's a problem with analogies. Had to fit it somehow though. If only the post was about eternal rays of sunshine...
1998 was when an article came out in Scientific American on peak oil. Was that your trigger?
People adapt, but typically do little to nothing to forestall what they will have to adapt to. So, from a practical point of view, climate forecasts aren't seeming particularly useful. But they do have to pay the mortgage some how, so don't point out the futility too loudly.
It's between you, me, and the bizarre subset of blog readers who view comments from old posts.
I didn't start using Peak Oil as a concept until 2004. I had been living amid Seattle's sudden ramp-up in real property values, and heard about the 'wealth effect' of home prices rising nationally driving up consumer debt. It was clear that was going to end badly, but I didn't have a clear idea as to when until the ARMs with the 5-year balloon payments exploded in popularity in 2001. At that point you could say, "you'll be able to stick a fork in this in 2007."
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