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richardhutnik on 15 June 2012
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Kasz216 said:
richardhutnik said:

The Gini coeeficient did get worse earlier last decade, right before the bubble hit.  During the years of Clinton, where taxes went up on the upper end some, it got softened.  Now, it is still a bit early to say what is going on, but apparently the wealth are doing better.

I'm not sure where your getting that information from.

The Dot Com bubble burst in 2000.  Individual Gini Coefficent dropped off WELL before then.  In 1997.

While Family and Household Gini coefficents rose in 2000.

Chart again....

http://3.bp.blogspot.com/-1Y25WlUbsXM/TqdJJKE5YHI/AAAAAAAAEgc/mEfoQs_f7xs/s1600/US-Gini-Coefficient-for-Individuals-Families-Households-1994-2010.png

 

Individual Gini Coefficent is what you'd use to measure the Matthew Effect and well... it just doesn't seem to be happening lately.

Well, unless you consider the fact that rich people are more and more likely to marry other rich people part of the "Matthew Effect"

 

Although, to be 100% honest with you... I'm sick of using the term Matthew Effect... because this isn't the Matthew Effect.  The Matthew Effect refers to the fact that famous researchers will get credit for observations and discoveries by less favorite ones.

It wasn't meant to have economic implications.

Wealth Condensation would be a better phrase.

 

Either way, for a long time now, the individually wealthy have been getting less wealthy, this has been masked by the rise in "group sorting" in marriage and a few Super rich dudes being super freaking rich making people jealous.

 

So I know what your thinking   "So where did all that extra money created go?"

If I had to take a guess?   I'd say the expansion of the Labor Force.   Keep in mind Labor Force Participation Rates are a LOT higher now then they used to be.


Used to be is pre-2000?  Are you talking about the United States or the world?  Labor force participation has declined since a high point in 2000.  Of course, more are getting old, but private sector hiring flatlined last decade and now only shows a bit of recovery, but still is not good.

http://www.businessweek.com/the_thread/economicsunbound/archives/2009/06/a_lost_decade_f.html

Here is a chart from since 2002.  I would dig back further, but it would likely be too big to fit here:

http://data.bls.gov/timeseries/LNS11300000


In regards to what is discussed, the focus had to do with looking if the idea of compounding of benefits for people who are advantaged is a good thing or not.  So, maybe "Mathew Effect" is a worn out turn, but the phrase "rich getting richer" is still out there.