Forget the generation gap …

… the gulf between rich and poor tells the real story of our times

In the Guardian yesterday, I wrote about why the Grattan Institute’s latest report on wealth differences between generations is really about class conflict and the rise of the patrimonial society.

I did an interview about it with Wendy Harmer and Robbie Buck on ABC Radio Breakfast Sydney. Listen at 2:59:00.

11 thoughts on “Forget the generation gap …

  1. Kevin Drum has a nifty chart showing how the arbitrary cutoff dates between “generations” fall on peaks and troughs of the economic cycle, distorting the comparisons.

  2. This Tony that wrote in is tripping. What decade is he living in? You see we make up our minds in one decade, and we keep stuck to our beliefs two or three decades beyond where these ideas might have been useful. Me included. Were texter Tony speaking in 1968, Sure. Good point. But has he not seen anything afoot since then?

    If we have sound money and good policy these rich guys will be competing against each-other and they should be downwardly mobile. Without rich guy downward mobility we are destroying everything, even the gene pool. If we have a sole trader paradise, under good policy the workers paradise can follow, and this can work at any reasonable level of government spending. But never with high debts.

    Gregory Clark tends to be an elitist himself. But in a Farewell to Alms he shows that the success of the English can be traced in part to circumstances wherein for hundreds of years rich slobs were downwardly mobile. And we’ve lost this now. We’ve lost this downward mobility of the rich and if we don’t get it back we are on the way out.

  3. Soeaking for the class of Limey cocktail rubes, I am very disappointed in the lack of effort being put into the generations story by lazy pundits. When I was a lad, bullshitters at least blinded us with Fourier transforms, factor analysis and Monte Carlo simulations. Those were the days! [Reaches for whiskey sour]

  4. As you wrote, Graeme, Tony was really tripping. If he’s sick of this ‘rich versus poor’ stuff then yeah, let’s get rid of the inequality imediately by having a levelling.
    Oh, no, didn’t mean that…

    What they mean is, of course, that one side in the struggle should just give up. Not the rich of course. It’s the poor who should stop whining and go off count their pennies and cents. The rich meanwhile, are they giving up increasing their stock prices and grabbing greaters market share? Not laying off more workers to cut costs? Stopped asking for more and greater bonuses?

    Furthermore, isn’t it ‘they’ the rich, people like Tony, who think that everything that happens is fair with free markets and competition and all that jazz?

    What they really mean is that there should be no attempt to have any kind of conscious negotiation. There can’t now be a political renegotiation, they say. And, so, you should now shut up about it.

    The point made by Professor John and others, of course, is that with increasing inequality, inheritance, there can’t be an enconomic renegotiation either. One side has the capital, wealth, control of resources: The other side, doesn’t. In other words, the inequality, if it is allowed to keep increasing, inevitably destroys all political, economic and then social systems.

  5. Dammit, Quiggin, ‘the lion’s share’ isn’t ‘lots’ or even ‘most’; it’s all. Check your Aesop.
    THE LION went once a-hunting along with the Fox, the Jackal, and the Wolf. They hunted and they hunted till at last they surprised a Stag, and soon took its life. Then came the question how the spoil should be divided. “Quarter me this Stag,” roared the Lion; so the other animals skinned it and cut it into four parts. Then the Lion took his stand in front of the carcass and pronounced judgment: “The first quarter is for me in my capacity as King of Beasts; the second is mine as arbiter; another share comes to me for my part in the chase; and as for the fourth quarter, well, as for that, I should like to see which of you will dare to lay a paw upon it.”
    Unpleasantly relevant, actually.

  6. James, had a look at what Kevin Drum has written and what really leaps out down under is how “Millennials” have about half the income they “should” have compared to people in the US in the 70s. These days I get paid twice as much for 20 hours work as my father was paid for 40. (Mind you, it takes me 60 hours to do it.)

  7. “What can be done about rental stress.”

    Thats the question alright. The key to the good life in this country is finding out how to have first world wages with third world housing costs. We cannot do this with the quarter acre block being the goal. Its spacious high-rise we are after. And the “New Urbanism Movement” has shown us how to do this high-rise right for a change.

    We have a long history of doing stupid stuff that isn’t going to contribute to the third world housing costs goal. Sometimes really obvious stupid stuff. As if we had children running things.

    There’s a lot of political correctness involved even with this sort of thing. For example Joe Hockey said a lot of the right stuff in his farewell speech. So why was he not able to actually put these better ideas he revealed, into practice, while he held such an high office? We had no hint of the deeper thoughts of Joe Hockey until it was too late. Was he secretly reading my stuff on Catallaxy? There was no indication that he was harbouring these views until he had already quit.

    I think the answer is that when you formulate policy you open the door, get all the bankers to leave the room, and the rest of us try and get bipartisan programs going that will do the job. This high cost of housing has come about through a bankster paradise. We let the bankers dominate policy and they ruined everything. The socialists can stay. But the bankers have to go.

    The story you linked to. These are about the most heart-breaking stories imaginable. Once you are homeless its incredibly hard to pull yourself out of it. And these old guys. We have changed the rules on them so many times. We can get things wrong with the young folks and there is still time to make it up to them. But if we mistreat our older brothers and sisters like this, we run out of time to help them. Its not okay. Its not funny anymore. Though we be Christians no more we still need to get about with a Christian ethic.

    High paying public servants and bankers have to realise that their jobs just aren’t so important, next to running surpluses and looking after our old girls. And there is no Malthusian downside to being generous to older ladies and gentleman. You want to be generous to solo Mums for example. But if you are too generous you’ll likely get more babies on the welfare. We don’t have that downside when its talking about these old ladies who cannot pay the rent.

    Just build the housing, write the cheques. Make the old girls happy. It doesn’t cost anything substantially. In the long run its creating welfare families of three or four kids that is costly. Not helping older ladies lead the good life. Just do it. Not like with younger people; you try and do the right thing you’ll wind up with all these feral children running round. Ganging up on you. Stealing your copper piping and all that sort of thing. But there is no substantial downside to making the later stages of life happy for our girls.

    Here is a bit of an introduction to getting hi-rise right.

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