This is an interesting post on income inequality across the nation’s states. What it adds to his prior posting is a brief synopsis of Jamie Galbraith’s model of what’s going on for the folks at both ends of the spectrum. I find it notable that both groups live on a raft.
The rich raft is the stock market – as the market rises and falls so do they. This says two things to me. One is that the rich are not easily distinguishable from firms for the purpose of modeling, i.e. that distribution of firm size and the distribution of individual wealth are probably the same. But more importantly, as a group, the rich have common cause in creating economic conditions that are, in short form, whatever is good for the stock market.
The poor live on a raft of social programs: the social security, food stamps, the earned income credit, and in the poor states the federal minimum wage. That should create common cause across that vast group to support state policies to improve and maintain those programs.
What I find notable is that in both cases the common cause of the two groups is about the nature of how the state engages with the market as a complementary actor. That again is the model exposed by the voteview work on legislative voting patterns. E.g. that the economic left/right axis practically one to one with the small/large economic actors. Those on the left looking to provide complements for the small actors and those on the right striving to aid the large ones.
this is an elegant and compelling metaphor. thank you. JG