Income inequality much worse in blue states than in red states

[orcus]

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One reason Democrat politicians talk a lot about inequality may be that Democrat-dominated states have much higher levels income disparity.
Income inequality is higher in states that voted for Hillary Clinton in 2016 when measured by the average income of the top one percent against the average income of the bottom 99 percent, according to data from a new report by the Economic Policy Institute. For Clinton states, the top incomes were on average 23.6 times the average income for the other 99 percent.

In Trump states, the average for top earners was just 19.7 times the average for everyone else.

Clinton won the majority of the vote in the most unequal state, New York, where top earners make 44 times what other households do. She took 8 out of the top ten, with Trump winning only Florida and Wyoming out of the most unequal states.

[Cavebear]

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You are looking at States with large cities, and large cities tend to have the highest income inequities.  It has been a historical fact for over a century that largest cities tend to have both the poorest people and the richest people in them.  Therefore the income inequality is greatest. 

As opposed to most Republican farming States and rural districts where most people are all equally poor and the inequality is less therefore less.

And inequality of income does not mean most of the residents of an area are bad off.  If I live in a place where the average annual income is $50,000 but a lot of people make $5 million, that looks like "inequity".  But if I like in a place where pretty much everyone earns $35,000, that's "equity of income". 

Which would YOU prefer?

[Baruch]

Cavebear - good analysis.  This is why arguing averages is self defeating.  Too many uncontrolled (and unmentioned) variables.

I don't see a problem with income inequality per-se ... given that it will be fixed shortly by national bankruptcy not seen since Weimar Germany.

[Cavebear]

Cavebear - good analysis.  This is why arguing averages is self defeating.  Too many uncontrolled (and unmentioned) variables.

I don't see a problem with income inequality per-se ... given that it will be fixed shortly by national bankruptcy not seen since Weimar Germany.

Thank you.  But what are you doing about the coming stock market crash caused by Trump. Stocking gold coins, bitcoins, or moving into CDs and Money Market Accounts?  Stashing freeze-dried food?

[Baruch]

Thank you.  But what are you doing about the coming stock market crash caused by Trump. Stocking gold coins, bitcoins, or moving into CDs and Money Market Accounts?  Stashing freeze-dried food?

Something will happen tomorrow, good or bad.  As one drop of water in an ocean of humanity, I can THINK I make the waves go.  Diversify, diversify, diversify.  Same advice last year, same advice every year.  People think they can predict the future (yes I watch market reports from R and L).  I didn't expect last year, that NK would seem to act responsibly.  I didn't expect a trade war with China and Europe.  The trade war is negative on my investments ;-(  It is hard to rebalance other than tossing a coin (large cap vs small cap, long term vs short term, domestic vs international).

My paper investments haven't done that well vs inflation.  I expect to lose everything in the not distant future ... even closely held items that aren't paper or electronic.  I have been there not long before (didn't have a bed to sleep in for 6.5 years, still live in a slum (partly by choice now, not by choice then)).  I had to borrow a friend's car for a couple of years, because my car died.  Still fighting age, sickness and neurosis ... and losing.  Death awaits ... but as St Augustine said in his autobiography about meeting The Almighty (in this life or the next) ... "not yet, not yet".

[Cavebear]

Something will happen tomorrow, good or bad.  As one drop of water in an ocean of humanity, I can THINK I make the waves go.  Diversify, diversify, diversify.  Same advice last year, same advice every year.  People think they can predict the future (yes I watch market reports from R and L).  I didn't expect last year, that NK would seem to act responsibly.  I didn't expect a trade war with China and Europe.  The trade war is negative on my investments ;-(  It is hard to rebalance other than tossing a coin (large cap vs small cap, long term vs short term, domestic vs international).

My paper investments haven't done that well vs inflation.  I expect to lose everything in the not distant future ... even closely held items that aren't paper or electronic.  I have been there not long before (didn't have a bed to sleep in for 6.5 years, still live in a slum (partly by choice now, not by choice then)).  I had to borrow a friend's car for a couple of years, because my car died.  Still fighting age, sickness and neurosis ... and losing.  Death awaits ... but as St Augustine said in his autobiography about meeting The Almighty (in this life or the next) ... "not yet, not yet".

Diversification in investments is always sensible.  But early this year, I decided that Trump was going to wreck the US economy and pulled out everything in US stocks and put them in Money Market accounts (leaving money in international stocks, since other countries would be trading normally among themselves).  So I have a mil in CDs, MMAs, international stocks, savings bonds, and savings accounts at several banks waiting to be re-invested.  I'm getting about 3% while the Dow goes nowhere.

I might put some in a rental house or two on my street since they would be easy to watch other.  I really regret not buying the ranch house next door; that would have been perfect.

I'm not touching gold or silver or bit-coins; too much fluctuation.  I'm in a "hold" now in mostly guaranteed inflation-equal investments. I may go back into stocks if things look better a couple years from now.  I just think stocks in general are going to stay about where they are for a while, and I never try to pick individual ones.

[Baruch]

Diversification in investments is always sensible.  But early this year, I decided that Trump was going to wreck the US economy and pulled out everything in US stocks and put them in Money Market accounts (leaving money in international stocks, since other countries would be trading normally among themselves).  So I have a mil in CDs, MMAs, international stocks, savings bonds, and savings accounts at several banks waiting to be re-invested.  I'm getting about 3% while the Dow goes nowhere.

I might put some in a rental house or two on my street since they would be easy to watch other.  I really regret not buying the ranch house next door; that would have been perfect.

I'm not touching gold or silver or bit-coins; too much fluctuation.  I'm in a "hold" now in mostly guaranteed inflation-equal investments. I may go back into stocks if things look better a couple years from now.  I just think stocks in general are going to stay about where they are for a while, and I never try to pick individual ones.

There was a big win, pulling out at the beginning of 2008, and putting all in at the end of 2009.  And that opportunity is coming up again (trade war and brexit).  But the problem is timing.  There is a change of regulation regarding heavy-crude refining, that will affect the whole sea shipping business, including oil transport ... they are forcing low sulfur fuel on the merchant marine.  If that isn't reversed, given the shortage of low sulfur diesel ... the price pressure on regular fuel will be immense, they are predicting $160+ dollars per barrel for sweet crude by 2020.  Iran and Venezuela are high sulfur crude, so the regulation seems very political at the moment.  There are very few refineries that can process heavy crude.  Markets are only approximately fungible.  You can't replace regular cars with natural gas powered cars, overnight, for example.  If a hot war develops against Iran, or Venezuela undergoes conservative counter-revolution .. then that will change things indirectly.  The sweetest oil of all time, is gone.  There were oil fields in Poland, 100 years ago, that were almost pure paraffin.  California oil wasn't well developed at that time (double entendre) because it is heavy crude (La Brea Tar Pits).  And China or Europe collapsing from the trade war, will joker it all.

[Cavebear]

There was a big win, pulling out at the beginning of 2008, and putting all in at the end of 2009.  And that opportunity is coming up again (trade war and brexit).  But the problem is timing.  There is a change of regulation regarding heavy-crude refining, that will affect the whole sea shipping business, including oil transport ... they are forcing low sulfur fuel on the merchant marine.  If that isn't reversed, given the shortage of low sulfur diesel ... the price pressure on regular fuel will be immense, they are predicting $160+ dollars per barrel for sweet crude by 2020.  Iran and Venezuela are high sulfur crude, so the regulation seems very political at the moment.  There are very few refineries that can process heavy crude.  Markets are only approximately fungible.  You can't replace regular cars with natural gas powered cars, overnight, for example.  If a hot war develops against Iran, or Venezuela undergoes conservative counter-revolution .. then that will change things indirectly.  The sweetest oil of all time, is gone.  There were oil fields in Poland, 100 years ago, that were almost pure paraffin.  California oil wasn't well developed at that time (double entendre) because it is heavy crude (La Brea Tar Pits).  And China or Europe collapsing from the trade war, will joker it all.

Well, no I didn't pull out in 2008.  My sister was the genius at that time.  She pulled all out in early 2008 thinking things looked bad and went back in around 2012.  I just stayed in, but when it started going up again, I had plenty to move in.  Pretty much doubled  my assets.evenything by 2016. 

Considering Dad's wretched stock history (he picked individual stocks) Sis and I did sensible moves.

I don't think oil is the setting for stock market changes anymore.  It's more service and finance and tech in the US and manufacturing and tech overseas.  But I've always been an index fund investor and plan to stay that way.

[Baruch]

Well, no I didn't pull out in 2008.  My sister was the genius at that time.  She pulled all out in early 2008 thinking things looked bad and went back in around 2012.  I just stayed in, but when it started going up again, I had plenty to move in.  Pretty much doubled  my assets.evenything by 2016. 

Considering Dad's wretched stock history (he picked individual stocks) Sis and I did sensible moves.

I don't think oil is the setting for stock market changes anymore.  It's more service and finance and tech in the US and manufacturing and tech overseas.  But I've always been an index fund investor and plan to stay that way.

Provided the aggregate managers do a good job (aka what makes up an index) ... indexes are pretty safe against short term changes.  Unexpected large moves ... are pretty much impossible to anticipate.

[orcus]

I'm sure that if I had posted a source from any other source most of you'd be up in arms about conspicuous consumption, the callous wealthy, and the like. Income inequality is only bad when it concerns people who don't pay for your political agitation.

[Baruch]

I'm sure that if I had posted a source from any other source most of you'd be up in arms about conspicuous consumption, the callous wealthy, and the like.

Facebook will be less conspicuous after today ... ouch!  $120 billion in market cap.  The Chinese tong chopped them down to size.

[Cavebear]

Provided the aggregate managers do a good job (aka what makes up an index) ... indexes are pretty safe against short term changes.  Unexpected large moves ... are pretty much impossible to anticipate.

I did "buy and hold" Vanguard Index Funds for 30 years and about 200K became a Mil.  Deciding Trump is going to wreck both the domestic and world economy, I moved everything to so MMA and a few international funds and 2.5% CDs.  I'm in "protect-mode".  When Trump is removed by impeachment or the 2020 election, I may move funds back to stocks.

This is just an amateur suggestion, of course.  But I've done well.  And it isn't "timing the market", either.  I'm timing the politics...  When idiots are in charge, protect your money.

[Shiranu]

Bah, Cavebear beat me to it... if everyone is poor, then wealth inequality will not be as pronounced. That doesn't make being poor a good thing, and that doesn't make states like Mississippi or Missouri magically better than California or New York. If you say you would choose the majority of Red states over Blue states...

Both issues need to be addressed, it's not a one-or-the-other situation.

[Cavebear]

Bah, Cavebear beat me to it... if everyone is poor, then wealth inequality will not be as pronounced. That doesn't make being poor a good thing, and that doesn't make states like Mississippi or Missouri magically better than California or New York. If you say you would choose the majority of Red states over Blue states...

Both issues need to be addressed, it's not a one-or-the-other situation.

The solution to income inequality can be easy.  Communism (which I abhor), Socialism (which has possibilities regarding universal health care and education, both of which seem to be good things), and Capitalism with Unions to keep business profits shared among owners and workers.

[Baruch]

Bah, Cavebear beat me to it... if everyone is poor, then wealth inequality will not be as pronounced. That doesn't make being poor a good thing, and that doesn't make states like Mississippi or Missouri magically better than California or New York. If you say you would choose the majority of Red states over Blue states...

Both issues need to be addressed, it's not a one-or-the-other situation.

Free money won't make everyone wealthy, it will end up making everyone poor eventually.  But that is for the next administration to worry about.  Today's administration (thanks to time delay) gets all the credit for their false genius.  Short term thinking is necessary, but it also leads to ruin.