Supply-side Economics

 

Fool Me Once, Fool Me Twice

That I’d fallen for a lie?
You were never on my side
Fool me once, fool me twice
Are you death or paradise?
Now you’ll never see me cry
There’s just no time to die

It's nice to fool anyone.

I have posted hypothetically before about not understanding that there is a difference between a median and a mean. https://dbeagan.blogspot.com/2018/08/wonderful-world-dont-know-much-about.html, but apparently it is a real problem. The chart below are actual incomes as reported by the US Census Bureau. The dots are the reported mean income at the midpoint of each income quintile, and the midpoint of the top 5%.

While mean income has increased from $59,698 in 2019 US Dollars in 1975 to $98,088 in 2019 US Dollars in 2019, an increase of 64%, median income has only increased by 34%, from $51,124 in 2019 US Dollar in 1975 to $68,703 in 2019 US Dollars in 2019.  The problem, is that while the shape of the income distribution curves above are determined by the mean income, the median is what occurs at 50%. Since “supply-side” “Reaganomics” was adopted after 1980, the rich have demonstrably gotten richer, and while the poor may not have gotten poorer, the typical, e.g. median, income has barely changed.  Is it any wonder that the economic markets reacted so badly to UK Prime Minister Liz Truss’ announcements of a return to “supply-side” tax cuts or why then Kansas Governor Sam Brownback’s tax experiment in “supply-side” economics was such a disaster.  I think the figure above shows what is death and what is paradise.  Don’t get fooled again. Twice is more than enough.