Posts by jm:
Graphs are dangerous tools.
October 1st, 2011
Graphs are useful tools for breaking down complex information into readily understandable comparisons. However the simplification of a graph can also be misleading. You can place entirely unrelated information into a table then make a graph of it and people will make inferences from it because if it is in a graph, it must be related. It is important to pay attention to the X-axis, Y-axis, and then try to break down the charted lines and the information they contain within.
In the graph above, note that it is measuring the percentage change since a certain date, but then it is also adjusted for inflation. Ultimately it shows that US GDP per capita has roughly doubled since 1967, even when adjusted for inflation. ”Per capita” is an important consideration here since this graph has three other lines in it which are not labeled “per capita”. Per capita means per person and is based off of total population. However the orange and blue lines in this graph show us measurements “per household.” A household and a person are not the same thing. According the the US Census Bureau the population of the US from 1970 to 2009 has grown by 34%. This is the number used by per capita. However the number of households in the US from 1970 until 2009 has grown by nearly 81%. If the number of US households had increased at a rate equal to the population instead of more than at double the rate of population growth, the blue line labeled “Median household income” would shift upward and align more closely with the green “US GDP per captia” line.
The blue line, whether measuring households or individuals, is still above the baseline, showing a 20% increase in real income (“real” meaning it factors inflation into the calculation). So even if all other things were held equal, the average household would be earning 20% more than a household from 1967. While that may not be equal to the increase in income for the top income earners, it is still an improvement. This number being smaller than the increase to the top 5%, but unless one can prove that the top 5% did not deserve (didn’t earn) this increase or came by it through illegal means, then the top 5% having a larger increase is simply a matter of envy.
Aside from the simple real income increases, one should factor in what the rise in GDP has caused and what measures of real wealth have improved. Income and assets are not wealth. Wealth is goods and services we desire or possess. Wealth has subjective factors. It includes a value which we as individuals place on items. Income is simply a number in dollars, which we can then use these dollars to obtain the goods or services we desire thus accumulating wealth. This is a simplification of wealth, but for these purposes it will do. Now look at the increases in wealth for the average American since 1967.
Even if real income had not increased whatsoever, real wealth has increased since 1967. “As recently as 1993, only 68 percent of all occupied housing units had air conditioning. The latest results from the 2009 Residential Energy Consumption Survey (RECS) show that 87 percent of U.S. households are now equipped with air conditioning.” (US Energy Information Administration) Based on the the same data, 1980 numbers show that only 55% of households had either central or window/wall unit air conditioning. Having an air conditioner is surely a measure of wealth; it is something that is desired and makes life more comfortable.
In 2009 of the 113.6 million US households, 112.2 (98.8%) had a television. 88 million (77.5%) households had 2 or more televisons, and 61.9 million (55.5%) had LCD, Plasma, Projection, or LED televisions. In 1993 only 57.1% had more than one television and not a single person in the country, not even the richest few individuals, owned an LCD, Plasma, or LED television. (All data comes from the US Energy Information Administration’s Residential Energy Consumption Survey) Similar statistics are available for refrigerators, computers, video game systems, cars (and included options), and many other factors that could be included as a measure of wealth. Many of the items commonplace in the homes of those in poverty were not even available to the most wealthy in 1967. 2005 US Department of Energy studies show that of the households below the poverty line 38% have a computer, 29% have internet access, 52% have a VCR or DVD player, and 55% own a cell phone. All measures of wealth which were inaccessible to even the wealthy in 1967. So while the numerical income of the median household income may not have drastically increased, the options and wealth of those individuals has increased dramatically.
The last line of the graph, the purple Minimum Wage line, is not a direct corollary to any of the other lines in this graph. The minimum wage is a measurement of dollars to a single hour worked. All other lines in this graph are taken on a yearly basis. It could be assumed that everyone who earns minimum wage works 40 hours a week, 52 weeks a year. But to make this assumption then the earners in the top 5% and the median household incomes should all be normalized to a 40 hour, 52 week year. However someone earning minimum wage could work two jobs at minimum wage, or be at work 100 hours per week and earn (based on current minimum wage) nearly $50,000 a year which is above the median household income. The typical minimum wage worker in the United States does not work a 100-hour work week, but instead the Bureau of Labor Statistics shows that only one-third of workers who earn minimum wage work 40 or more hours in a week and most of these minimum wage employees either rise above the minimum wage rate, or leave the job within a year.
To put this all more simply, be aware that graphs can be misleading. Always study it and break down the components of the graph before drawing any conclusions based upon it.
Comic from Calamities of Nature, typically liberal but typically funny.
The Gini Coefficient
September 9th, 2011
While funny, I’m going to point to one flaw in the scientists supposed formula for the creation of a supervillain. So today I’ll take you on a rant adventure through the Gini Coefficient.
First and most importantly, the Gini coefficient is overused, marginally useful horse droppings.
The Gini coefficient was created in 1912 by Corrado Gini (Thanks, wikipedia!) and has since become a favored tool of what Thomas Sowell calls The Anointed. Those who hold in their minds their moral, academic, and social decisions are better than those of the common man and must bear the burden of making the choices for the lowly common man. The Gini coefficient is especially prominent in economics and often cited in wealth redistribution policies.
Sadly for the anointed, inequality is a relative term. Sure, the word itself has been forced onto use to stir up feelings of pity and sadness, “Oh, but if only things were equal,” “Things should be fair.” But ultimately the term inequality is by it’s very definition relative. However through clever wording over time, inequality has become a social status term associated with the downtrodden, and not simply a word indicating some disparity with direct comparison.
But before I go off on the track of the evils of attempting to ensure equality through government means, I’ll stifle the outpouring of comments I have on the matter and get back to flaws in the Gini coefficient, not the flaws in “equality” politics.
The most common measure of the Gini coefficient is measured in pre-tax income and is not consumption based. A focus on pre-tax income does not factor in the many redistributive policies currently in place. If one family, through laziness or unfortunate circumstances, has a yearly income of $5,000 and a second family holds a yearly income of $40,000 then we would say there is a great measure of inequality. However a true measure of equality should factor in the approximately $300/month(approximate national average) of SNAP benefits (food stamps), Section 8 housing assistance at $300/month, and Medicare/Medicaid benefits of an additional $200/month (and this doesn’t include innumerable other programs from Head Start and college scholarships (not based on being scholarly), to public transportation and favorable loan terms). $5,000 compared to $40,000 is only 1/8th the income. However a consumption-based comparison of $14,600 to $40,000 is slightly better than 1/3rd.
Also there should be a comparison of the goods available for purchase for the “unequal” economic groups represented in the Gini coefficient. If I want to get hammered would like to enjoy a few drinks with friends, I may go out and buy an affordable $6 bottle of Popov vodka, a mid-range Smirnoff at about $18/bottle, or if I was wealthy I could buy Stoli Ultra for $100/bottle. The end goal of drinking is still accomplished. The house parties of the wealthy stocking finer vodka than a college party does not necessarily equate to inequality in a strict dollar-to-dollar mathematical sense as the Gini coefficient would show.
Even a strict dollar-to-dollar comparison showing high levels of inequality is not bad when the wealth of the nation as a whole is great. Inequality is relative. If the poorest individual made $1 million/year in real dollars and the wealthiest was pulling down $10 billion/year there would be an incredible equality gap, but no one would make the claim that the millionaire is hurting due to inequality. (Real dollars. Not nominal dollars. This is not a discussion on wealth creation and the feasibility of a nation of millionaires without rising prices.)
Nearly every American now lives in a home with air conditioning. The Queen of England didn’t even have air conditioning 100 years ago (unless she was an early adopter, then 108 years ago she may have had one of the first functional models, but you get the point). Wealth has steadily grown throughout all history through capital accumulation. Inequality is bound to exist, but that doesn’t mean it is the purpose of government to regulate this inequality.
Supervillains don’t come from the Gini coefficient.
Comic from SMBC
Hardcore tats.
August 15th, 2011
I’m thinking I’ll go with a skull on my right “pec”. Maybe one with flames.
Comic from XKCD
Two archetypal Facebook users
June 30th, 2011
In my experience there are two primary types of users on Facebook. The largest group is the ‘Liker’. The Liker roams their ever-expanding news feed, liking innumerable posts and offering short one-liner comments such as, “I’m sorry to hear that” or “Hang in there” on the emo posts, or “Glad to hear the news” and other sorts of simple acknowledgement for less /wrists related posts. (For the uninitiated, say “/” wrists aloud).
The second major group is the ”Asshat”. They read each post with a discerning eye, looking for typos, logical fallacies, and any other nitpickable statuses then attempt to bring embarrassment to the poster, or to divert the attention away from the original poster and onto themselves. There are a few other types of Facebook users but most are simply subcategories of these first two such as “Middle-Aged Housewives” which make up a significant portion of the ‘Liker’ population.
Comic from Pajama Forest
Wait… What?
June 27th, 2011
It has been far too long since I’ve thrown anything up on here. I love the comics that you read… pause… then understanding sweeps over you, bringing humor mixed with mild revulsion. Nothing quite like it.
Comic from SMBC
