Why some people are rich and others poor can be explained in a number of ways. Income and Wealth focuses on who gets what and why. It explains the dynamics of income generation, how it is measured, and how such dramatic disparities in distribution come about. The book first defines various characteristics of income, with an emphasis on the gap between the rich and the poor, and reviews several theories to explain the disparities. Subsequent chapters discuss such timely topics as the vanishing middle class and the sky-high salaries of CEOs, Hollywood stars, and athletes. The final chapters consider the implications of policies, such as the minimum wage, taxes, immigration, and trade quotas, and expand the discussion to consider international comparisons. Featuring graphs and charts, a glossary of key terms, and a listing of references and resources, Income and Wealth explains the intricate, and often controversial, effects of economic policies on individuals, families, and communities. Moreover, it shows how the numbers can be manipulated by policymakers, pundits, journalists, and academics to promote various agendas—and shows readers how to recognize hyberbole and make better-informed decisions.
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Editorial Reviews
Review
"The election season, once again, brought up the myth that Americans are worse off because inequality of income has been increasing in the United States. Myths are harmless in literature. But if Democrats, like Rep. Nancy Pelosi, start using it as evidence for raising taxes when the new Congress reconvenes, there is potential for real damage to the economy and to our living standards. Cato Institute senior fellow Alan Reynolds' new volume Income and Wealth assembles facts to explain and understand this myth, using figures from the Statistical Abstract of the United States. Reynolds also provides a clear guide to the countless academic studies on the subject."
-New York Post
"[E]xplodes much of the downbeat economic conventional wisdom."
-The Salt Lake Tribune
"As part of a series aiming to improve economic literacy and decision- making, this volume is meant for general readers, high school and college students, or as a review for graduate students and those in business. Reynolds provides a guide to the growth and distribution of income and wealth in the US. He addresses statistics purported by the press and economists, arguing that these perspectives are often influenced by a misunderstanding of basic concepts and measures. He then explains those concepts and measures, as well as work and income, the idea that the middle class is declining, and claims that average wages have not increased, and includes a discussion of the income of the top one percent. He discusses CEOs and stock options, the distribution of wealth, using consumption as a measure of living standards, and recommendations to fix wage or income inequality."
-Reference & Research Book News
"Alan Reynolds has produced a most important examination of one of the dominant political myths for this current two-year run-up to the 2008 presidential election….Mr. Reynolds argues persuasively in Income and Wealth that poverty and wealth in America are not directly related to each other; the poor are not poor because of the well-to-do. Moreover, both the upper one percent and lowest 10 percent of incomes are affected by unrelated dynamics that have nothing to do with the Democratic nostrum of income redistribution via tax remedies--Robin Hood-onomics….In easily accessible prose, he shows us how the two Americas crowd is messing with our minds with its statistical fabrications….Whether the truths revealed by Mr. Reynolds will silence the two Americas myth will depend on how widely his book gets circulated in this coming year. The truth may set us free after all."
-The Washington Times/The American Spectator
"Reynolds challenges many so-called myths held by academics, columnists, and public affairs junkies concerning inequities in the recent growth of individual income and wealth in the US. Beginning with a useful, lucid-to-the-general-reader chapter on concepts and measures, this book is intended to show that the growing gap between the rich and the poor in the US is mainly the result of the number of workers in households and their age and education, and that the so-called disappearance of the middle class is more statistical than actual. In fact, Reynolds contends that since 1973 total labor compensation has been increasing and that the distribution of consumption expenditures by income class points to a reduction in inequality as compared with 1986. A critical chapter refutes recent literature concerning huge increases in income going to the top 1 percent of taxpayers as being due merely to changes in tax laws. Reynolds also addresses the minimum wage, taxes, immigration, international trade, and globalization. The book excels in charts and tables, glossary of terms, and references, including online resources. An extremely useful addition to the literature in the ongoing conservative-liberal debate on the distribution of US income and wealth. Highly recommended. General readers; academic audiences, upper-division undergraduate and up; professionals."
-Choice
"Income and Wealth is stunning in its revelations and its deflations of popular Democratic superstitions….Reynolds, a senior fellow at the Cato Institute, is an economist of acute precision. For years he has defended the capitalist way of doing things, and this volume is a high tribute to his championship of basic American ideas."
-National Review Online
Review
"Turn to any page of Income and Wealth and you will be blown away. You will find something important about income and wealth that you didn't know and would probably want to know. Once you read this book, you'll realize what stunning economic progress the average American family has made. You'll also realize that the main way to get wealthy is--are you ready?--to work."
(David R. Henderson, Research Fellow, Hoover Institution, author of Making Great Decisions in Business and Life
)
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Just about everybody treats those assertions as if they are facts. That includes politicians on both sides, talking-head partisans, economics correspondents, and columnists--many with undisguised or thinly-veiled political agendas. They are supposed to be the experts, and the masses (like me) have to trust them; after all, our busy lives permit us only a limited amount of time for paying attention to politicians and the press. When the experts are nearly unanimous, that's a good signal that the five conventional wisdom assertions have to be true . . . isn't it?
That brings us to the big surprise, which Alan Reynolds sums up clearly and concisely: "Not one of those statements is even remotely close to being true."
This book is one of the best debunkings of conventional wisdom I've come across in a decade. It is a step-by-step dismantling of conventional wisdom about income and wealth distribution. Alan Reynolds does it methodically, one point at a time--using direct quotes from people who make those assertions, clear logic explaining what's wrong or misleading about those assertions, and facts and figures from easily-checkable references to official, government-published sources (such as the Statistical Abstract of the United States, the Bureau of Economic Analysis, and the Bureau of Labor Statistics).
Why, then, do so many people seem to accept the false conventional wisdom without question? I have a guess: Each of us likes to think the person we heard it from must have done their homework; otherwise they wouldn't be talking like that. Let's face it, assumptions like that save us a lot of work. In this case, however, I now realize that, by trusting conventional wisdom, I was being too lazy--and I strongly suspect that most of our country's so-called "economics correspondents" are guilty of the same thing I was.
I am thankful that Alan Reynolds is one who actually did the homework on this subject, then wrote a book laying out his findings. His attitude is one we should all adopt: "I accept nothing as an article of faith. I want to hear the logic and see the evidence. And you should demand nothing less. In the absence of logic and evidence, you should not give a hoot about my opinion. Reality is not a matter of opinion."
And I'll steal one more passage from his book: "No matter what one thinks ought to be done about taxes, spending, unions, immigration, minimum wage laws, and so on, the first thing that needs to be done is to get the facts right. If that happens, there will still be plenty of room for lively debates about all sorts of public policies. And they will be *honest* debates."
This book will always be within an arm's reach of my workstation. I highly recommend it, especially to anyone thinking about writing on the subject of income or wealth "distribution" in the United States of America.
Get this book, and get ready for a big surprise.
The main themes of the book, which recur throughout, are these:
1) Most published reports of income/wealth inequality are based, at best, on incomplete measures, failing to account for government transfers (from "rich" to "poor") and for the painfully obvious fact that two-earner households tend to have higher household incomes than one-earner or (especially) zero-earner households.
2) "Static" analyses of income/wealth inequality fail to account for the simple fact that people's income and wealth tend to increase over time as they develop ever greater skills and as their 401K plans grow over the years.
Reynolds also points out the only effective ways to achieve "true" income/wealth equality. Either have widespread poverty, so that nobody has anything, or have exorbitant tax rates so that nobody can keep anything.
This should be a very important book as we all decide what sort of President to elect in 2008.
that details the distribution of Wealth in the USA. Read more
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