public-enemy.jpgIt’s funny. You rarely see someone completely invalidate a blog post within the actual blog post. I mean, who starts with reasons why statistics might be skewed or less meaningful, then go on to completely rely on them to make a quite forceful point?

Tom’s upset that the mainstream media isn’t jumping up and down about a discretionary income report by the Conference Board. There’s a reason they’re not. There’s also some hypocrisy in them thar hills!

Follow me.

The recent report apparently shows (even given all the reasons not to buy the data) that “More Americans Have Discretionary Income”. Sounds great, right? Right. But before we let those visions of iPods dance in our heads, let’s ask a simple question: Who are these “more Americans” that enjoy more spending cash? Any guesses?

The rich?…..OF COURSE!

Read closely and you find:

Nearly 78 percent of all discretionary income is held by households earning more than $100,000. Average discretionary income for this segment, $66,451, is 2.7 times the national average.

Say it with me: The rich get richer.

Notice Tom doesn’t mention this fact? OF COURSE not. He has an agenda and the full story doesn’t line up with it. How does someone claim to hold the MSM accountable when his agenda-driven blogging is much more suspect than even those he criticizes? Good question. So the headline would be that the affluent have more pocket change? I can’t imagine for the life of me why the evil MSM might ignore that one. Here’s a hint: We’ve already heard that one.

“While the percentage of households with discretionary income has risen over the past several years, purchasing power remains concentrated in the wallets of the affluent,” says Lynn Franco, Director of The Conference Board Consumer Research Center. “More than three out of every four discretionary dollars flows to householders earning $100,000 or more. And their average discretionary income is more than 2.5 times above average. “

Hell, in 2005 the Conference Board even said as much in the title of the same report: “More Americans Have Discretionary Income But It Is Concentrated In The Most Affluent Families“. I guess they wanted to soften that a bit this year so they just made it: “More Americans Have Discretionary Income”. Tom doesn’t seem willing to hold them as accountable as he might the New York Times. You’d figure he’d be a sucker for games played with headlines.

But like a good Ginsu commercial, THERE’S MORE!

The top end of the affluent group (households with earnings of $200,000 and over) accounts for only 3 percent of total households and 5 percent of households with discretionary income. This group, however, has 38 percent of total discretionary income with an average of $173,613, more than seven times the national average.

Households with earnings of less than $50,000 represent nearly 60 percent of all households and 29 percent of households with discretionary income. However, they account for only 3 percent of aggregate discretionary income. Average discretionary income among this market is about $1,900.

So those making less than $50k a year have about $2k in spendable income…a great deal of which I’d bet goes to pay for stuff health insurance will not cover. How much did the same group have in 2005? $2,075. The poor get poorer.

What did Lynn Franco, Director of The Conference Board?s Consumer Research Center say of the data in ’05?

?Rising numbers of affluent households who control sizable amounts of discretionary income signal a favorable outlook for the luxury, travel and entertainment markets, as well as companies in the furnishings and housing sectors.?

Pardon me if I don’t do the trickle down dance!

(We won’t even go into how they define “discretionary” or “spendable” income)

 
  • Assuming you break from past practice and actually let a comment of mine through (2-3 previous attempts did not get through about 6 weeks ago) —

    The post was about the existence of discretionary income, how it exists for twice as many people now as it did a quarter century ago, and how it exists for a roughly 25% higher proportion of the population (12.5 increase divided by 51) than a couple of years ago.

    The income inequality canard has been addressed in the fact that the Census Bureau’s Gini coefficient of income inequality has gone up by only .08 during Bush 43 (2001-2006) after going up .29 during the Clinton Admin. Almost no one currently whining about income inequality was complaining then. As such, they’ve lost their right to be seen as credible now.

    Just for the heck of it — If everyone had discretionary income, but most had only a few bucks extra and a few had most of it, would you STILL insist on income redistribution?

  • It’s not intentional, Tom. I rescued this one from spam. We’ve never marked anything of yours as spam, so not sure why it got in there. The others must have done the same. We often just delete all of the several hundred instead of sorting through them all. Next time if you don’t see it, shoot one of us a note so we can look for it and release it.

    As to the substance of your reply, stop with the “redistribution” clap trap. Should I frame your like for tax cuts as wanting to “redistribute” money to the wealthiest Americans? It’s what that policy seems to have done. If we’re going to have an argument there, then yes, I think getting more money in the hands of the middle class is more important than the wealthiest having an extra $60k in the bank.

    The reality is that between 2005 and this last report, those making $50k and less had LESS discretionary income (from $2,075 to $1,900), while those earning more than $100,000 had more (from $62,110 to $66,451).

    So now we’re going to mix up Conference Board numbers and Census Bureau numbers to make an argument? The Conference Board clearly shows the rich have more disposable income and the poor have less. Let’s use one measure at a time.

    Or let’s dispense with the measure all together as you and I both know The Conference Board doesn’t really measure “discretionary income”.

  • #2, I will try to remember to copy and store if you can’t get from spam.

    The rich are paying more in taxes and a higher percentage of all taxes, while the bottom half as a whole isn’t paying any (unless you count SocSec, which is supposed to be a contribution-driven retirement program, and really doesn’t belong in the discussion). You can’t get much more distributionist than that. Well, I guess you could if you want to head into 1960s-style “guaranteed annual income” land.

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