The Great Compression

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Marginal Revolution

The Great Compression

by Tyler Cowen on September 23, 2007 at 6:44 am in History | Permalink

Paul Krugman recentlyblogged:

The middle-class society I grew up in didnt evolve gradually or automatically. It was created,in a remarkably short period of time, by FDR and the New Deal. As thechart shows, income inequality declined drastically from the late 1930sto the mid 1940s, with the rich losing ground while working Americanssaw unprecedented gains.

As you can see, the share of the top ten percent (not counting capital gains) falls steeply at about 1937 andflattens out by about 1942-43, with a slight uptick just afterwards. But I am puzzled by Krugmansdescription of the process. A few points:

1. 1937-38 were disastrous years for the American economy and also for the middle class, mostly becauseof bad contractionary monetary policy. This can be considered a second Great Depression and it aborted arecovery in process. Robert Higgs has shown convincingly that World War II was an economic disaster,look at the figures at consumption dont be fooled by aggregate gdp which is inflated by production for thewar.

2. Therefore I am not sure when the "unprecedented gains" came during this period. Yes 1940 was a year ofrecovery (and part of 1939) but is the claim that the middle class was created in that year? Surely not butthen I am confused.

3. Krugman cites "strong unions, a high minimum wage, and a progressive tax system" as driving the GreatCompression did these factors change so notably in 1937-44?

4. In real terms, relative to the time, the new federal minimum wage of 1938 was not especially high, evencompared to the minimum wage today. And the data are for pre-tax incomes, which means that progressive
http://www.marginalrevolution.com/photos/uncategorized/2007/09/22/19krugman2533.jpghttp://www.marginalrevolution.com/photos/uncategorized/2007/09/22/19krugman2533.jpghttp://www.marginalrevolution.com/photos/uncategorized/2007/09/22/19krugman2533.jpghttp://www.marginalrevolution.com/photos/uncategorized/2007/09/22/19krugman2533.jpghttp://www.marginalrevolution.com/photos/uncategorized/2007/09/22/19krugman2533.jpghttp://www.marginalrevolution.com/photos/uncategorized/2007/09/22/19krugman2533.jpghttp://www.marginalrevolution.com/photos/uncategorized/2007/09/22/19krugman2533.jpghttp://www.marginalrevolution.com/photos/uncategorized/2007/09/22/19krugman2533.jpghttp://www.marginalrevolution.com/photos/uncategorized/2007/09/22/19krugman2533.jpghttp://www.marginalrevolution.com/photos/uncategorized/2007/09/22/19krugman2533.jpghttp://www.marginalrevolution.com/photos/uncategorized/2007/09/22/19krugman2533.jpghttp://marginalrevolution.com/marginalrevolution/author/tyler-cowenhttp://marginalrevolution.com/marginalrevolution/category/historyhttp://marginalrevolution.com/marginalrevolution/2007/09/the-great-compr.htmlhttp://oregonstate.edu/instruct/anth484/minwage.htmlhttp://krugman.blogs.nytimes.com/2007/09/18/introducing-this-blog/http://www.marginalrevolution.com/photos/uncategorized/2007/09/22/19krugman2533.jpghttp://marginalrevolution.com/marginalrevolution/2007/09/the-great-compr.htmlhttp://marginalrevolution.com/marginalrevolution/category/historyhttp://marginalrevolution.com/marginalrevolution/author/tyler-cowenhttp://marginalrevolution.com/


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taxation is unlikely the major part of the story about the distribution of pre-tax income (noting the Yglesiascaveat that the rate of tax will influence pre-tax incomes through labor supply).

5. Here are some data on U.S. unionization. The history does broadly track Krugmans time frame, as longas one does not obsess over 1937-43 as being special. Note that optimistic estimates of the union wagepremium today run about 15 percent, so it is hard to see unionization as the dominant factor in the change inthe distribution of income.

6. The wartime economy, and the scarcity of labor, bid up wages for black workers, women, and manyremaining non-drafted male laborers (due to forced saving, however, consumption was low).

7. My explanation of the break in the chart emphasizes a combination of events: top incomes were crushedby the depression of 1937-8, the war economy put a further lid on top of high incomes (for reasons of lawand norms; surely the phrase "wartime wage and price controls" deserves to be uttered at least once), and thewar economy bid up wages for many people near the bottom and middle of the distribution. The wealthyclasses financed a disproportionate chunk of World War II, it seems.

8. Krugman mentions none of the factors listed in #7. Admittedly I may be wrong, but are not those factorsobvious candidates for an explanation?

9. It is a vitally interesting question why postwar America stayed at this new percentile distribution of income(more or less), even after recovery from the war. It may be possible to defend a version of Krugmansbroader hypothesis policy matters for income distribution in this setting, but the story then puts greaterstress on both the equalizing effects of catastrophes and also on path-dependence. That story might alsosuggest that strongly negative real shocks would be needed once again to make income distribution muchmore egalitarian.

10. How about this for an alternative story: "Crush the incomes at the top and then make the fat cats paymuch higher wages to protect the world and become a superpower. Impose wage and price controls aswell. See how long it takes before these distributional effects which dont exactly match the distribution ofeconomic talent reverse themselves in the aggregate." Im not sure thats right but at least it seems to matchmore of the history.

I am sensitive to the claim that many people misinterpret the words of Paul Krugman, so please do read hiswhole post. If he addresses these matters in more detail in his forthcoming book, I will let you know.

31 comments

Paul McMahon September 23, 2007 at 8:04 am

I note that the incomes used in the graph excluded capital gains. In the presence of high marginal taxrates, larger incomes tend to be diverted into financial instruments. For example, take a look at thepopulation of partnerships (Statistics of Income, IRS) and consider the rapid growth in the 70s and80s. A lot of this growth was due to real estate partnerships used as tax shelters.

The increase in non-capital gains incomes would seem to track the marginal tax rate cuts rather well.

(PS: I used to work on this particular study as the lead survey statistician.)

Justin R September 23, 2007 at 9:37 am

0 0 0Reddit 152
http://marginalrevolution.com/marginalrevolution/2007/09/the-great-compr.html#commentshttp://eh.net/encyclopedia/article/friedman.unions.us


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I agree with Jack. Suppose all wealth was confiscated and destroyed, and all forms of employment isoutlawed. Look at how equitable this society is, everyone has the same income ($0).

michael vassar September 23, 2007 at 10:44 am

Pauls point is the main thing of relevance here, but lets generalize it a bit further. The private companycar and the expense account are part of this story too, as are, in fact, all of the tax-burden driven

transitions from direct expenditures to benefits, expenses etc. Remember that top (federal only) taxbrackets were 87%-90% of income for most of this time. People at the top simply were not and couldnot have been working for income under such circumstances. They were getting compensation in otherways.

Dave September 23, 2007 at 10:52 am

I didnt see a link to the study shown in the graph, but a few questions need to be asked. Is that pre-tax or post-tax income? Does it count income from government transfers? In-kind governmenttransfers? Cash income only or benefits? Not including capital gains is only the first of many ways a

graph of this sort can be juggled. While policy might or might not effect inter-personal compensationlevels, there is absolutely no doubt that tax policy greatly effects how rich individuals structure theircompensation.

Paul Zrimsek September 23, 2007 at 11:34 am

What has everyone got against vertical gridlines these days? Without them, you have to count datapoints from 1917 to figure out that the Great Compression all of it! occurred in 1941-43. Wartimeinflation seems the likeliest cause; its persistence after the war may have something to do with thecontinued poor performance of bonds all the way up to 1981. Leaving capital gains out of a measure

of income for the top 10% will tend to exaggerate the importance of the bond market.

liberty September 23, 2007 at 12:20 pm

3. Krugman cites strong unions, a high minimum wage, and a progressive tax system asdriving the Great Compression did these factors change so notably in 1937-44?

Unions were at their peak after the imposition of NIRA (passed 1933). It is reasonable to imagine thatit could have taken a few years to have its full effect. Union membership peaked at about 34%. TheNRA also introduced a minimum wage, new income taxes and other taxes, strict price controls, public

works programs and some very heavy handed regulation.

Between 1941 and 1945 more than 1/3 of the top 100 American corporations were seized either inwhole or in part.

I absolutely believe that these things had a huge impact on the economy including compressing wages,dragging all incomes down, suppressing growth, scaring away investment and driving businesses intobankruptcy.

Its a wonder that we ever climbed out of the great depression at all, and with fits and starts (thank youJimmy Carter) finally have managed to recreate much of that intense growth that we had pre-FDR.

The EmperorSeptember 23, 2007 at 12:29 pm
http://empireoflogic.blogspot.com/http://economicliberty.net/


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Id like to see how the top 1% and 5% and bottom 1% and 5% fared over the years. It might showsomething very different. I suspect that the rise of the top 10% is due mainly to the dramatic rise inincome of formerly upper middle-class people, due to changes in society that reward talented andintelligent people (as opposed to the middle class era, where rich people made their money byinheriting it). In other words, its due to the rise in income of a substantial portion of the bottom groupof the top 10%.

Barkley RosserSeptember 23, 2007 at 1:46 pm

Neither Paul Krugman nor Tyler Cowen, nor for that matter any of the commenters so far, realy haveit. The Great Depression had very little to do with this. It was almost entirely a matter of World War IIand its very strong labor market, plus the pushing of the top marginal tax rate to 94% after the warstarted (it was 75% in 1939). Actually looking closely at the figure that Tyler presents shows it. Thesudden drop in the Gini does not start until 1940 (OK, a year before the US got into the war, but notgoing back to 1937, much less 38 or 39).

Anyone wanting to see an authoritative source on this matter should look at the old, but not disproven,

book by Morgan Reynolds and Eugene Smolensky from 1977, _Public Expenditures, Taxes, and theDistribution of Income: The United States, 1950, 1961, 1970_ Academic Press (yes, they do talkabout what happened before 1950, despite the title).

To Pat Mathews:

Although there is data on income distribution going back into the 19th century (big surprise, the 1890sappear to be the peak of inequality), it gets progressively less reliable as one goes further back in time,already pretty shakey once we are back as far as the 1920s.

happyjuggler0 September 23, 2007 at 1:58 pm

Imposing punitively high income tax rates like we had during the great compression and thereafterwill do wonders for the tax avoidance industry wherever you are in the world.

Same goes for wage and price controls, people still find a way to get paid, such as employer paidhealth insurance that is wrongly not recorded as income. This occurred during the great compressionas well and stayed.

Just because income isnt getting recorded by the IRS as individual income doesnt mean that there

isnt income, and Im not talking about tax evasion here, noting that tax avoidance is legal and taxevasion is illegal. Warren Buffett seems to have mastered the art of tax avoidance and has paid verylittle (in relative terms) in taxes over the decades even as his net worth soared. Nevertheless it seemspretty apparent that it is due to Buffetts mostly untaxed labor that his holding company conglomeratehas soared in value.

Looking at the graph it becomes apparent that there was a huge surge in income inequality after the1986 tax act. This tax act eliminated an awful lot of tax shelters, and also reduced the need for them byseverely lowering the income tax rate. Did employers suddenly start paying their top employees more

money at that time? I seriously doubt it. The more likely explanation is that during that two year jump inthe graph what happened is that the rich simply restructured the vehicles their income was taxedunder, and suddenly it wound up being recorded as individual income whereas before it was stillincome but not officially recorded as such. If such an obvious tax shift is being recorded without anasterisk, it seems logical to think that maybe the whole chart is an omitted asterisk.
http://cob.jmu.edu/rosserjb


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Perhaps a more properly conceived chart, taking into account the unseen income as well as the seenincome, would show a much more gradual rise in inequality from say 1942 to present, with an upwardslope the whole way similar to the decade from the mid 70s to the mid 80s.

Paul Krugman may wish to think that incomes were more equal during that long middle period, but it ismore likely a statistical illusion (there are three kinds of lies: lies, damned lies, and statistics), at

least in huge part.liberal September 23, 2007 at 2:06 pm

happyjuggler0 wrote, This tax act eliminated an awful lot of tax shelters, and also reduced theneed for them by severely lowering the income tax rate.

So I take it youre on record in favor of removing the current favorable treatment of capital gains?

If such an obvious tax shift is being recorded without an asterisk, it seems logical to think that

maybe the whole chart is an omitted asterisk.

The entire chart needs an asterisk, because citing marginal rates is a pretty meaningless exercisewithout information about the definition of taxable income and without the bracket structure.

happyjuggler0 September 23, 2007 at 2:13 pm

liberal,

I am most definitely not in favor of raising anyones taxes, but I can be convinced to radically lowereveryones taxes and radically lower government spending. My post was merely meant to be analternative explanation to Krugmans we need more big government agenda.

Steve SailerSeptember 23, 2007 at 2:35 pm

Dont forget the immigration restrictions that were passed in 1924 and took effect in the later 1920sand then were repealed in 1965, with the new law taking effect in 1968. It took awhile for immigrationmomentum to build up, but it was becoming significant by the later 1970s.

This is by no means the whole story, but economists shouldnt ignore this piece of the puzzle.

Yancey Ward September 23, 2007 at 3:07 pm

A very comprehensive comment by Happyjuggler0.

Liberal,

The US suffered less than Germany or Japan since its war production machinery was not obliterated.However, there was a long transition of refitting the capital stock to the production of consumer goodsafter the war. This was interrupted by the Korean conflict. This refitting involved remaking andscrapping/replacement of the war production capital base. However, the US sufferred mightily duringthe war as can be seen by any analysis of consumption during and immediately after WWII. This lossin consumption is the symptom of capital destruction/misallocation. That people dont understand this iswhy they always claim that WWII ended the Great Depression. The Great Depression did not enduntil after WWII.
http://www.isteve.com/


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Anthony Damiani September 23, 2007 at 4:47 pm

Pardon me Precisely what is the definition of economic talent if not the ability to thriveeconomically in whatever the given economy of the day happens to be? The ability to thriveeconomically in some sort of imaginary laissez fair system?

Yancey Ward September 23, 2007 at 9:57 pm

Barkley,

I am confused. What Happyjuggler wrote was that it was not evasion he was talking about, but ratherthe use of legal loopholes that you wrote of.

Also, very few immigrants today, or in the early 20th century, were well-off entrepreneurs when theyarrived in this country. Many of them became such people within a generations time, yes, but not onarrival.

doctorpat September 23, 2007 at 10:46 pm

War does not increase economic wealth- it destroys it in the most efficient way possible short ofboating capital out to the middle of the ocean and sinking it.

Actually, war DOES boat capital out to the middle of the ocean and sink it. WWII especially.

And the USA is lucky that it was one country in WWII that didnt change its statistics by reducing thedenominator.

Ian September 24, 2007 at 12:18 am

With all of the caterwauling that Krugman does on behalf of economic justice, why does he not simplysupport a move to a consumption tax, adjusted so as to first untax family spending to the poverty level(a/k/a FairTax).

The effective percentages, that different income groups would pay under a FairTax consumptiontax, is calculated by crediting a monthly prebate (advance rebate of projected tax on necessities)against all likely spending by citizen families (1 member and greater per Dept. of HHS poverty-leveldata). (Under the plan, a single person would receive ~$200/mo; a family of four ~$500 in addition

to working members no longer having tax withholding confiscated from the fruits of their labor everytwo weeks.) Prof.s Kotlikoff and Rapson (10/06) concluded,

the FairTax imposes much lower average taxes on working-age households than does the

current system. The FairTax broadens the tax base from what is now primarily a system of

labor income taxation to a system that taxes, albeit indirectly, both labor income and existing

wealth. By including existing wealth in the effective tax base, much of which is owned by rich

and middle-class elderly households, the FairTax is able to tax labor income at a lower effective

rate and, thereby, lower the average lifetime tax rates facing working-age Americans.

Consider, as an example, a single household age 30 earning $50,000. The households averagetax rate under the current system is 21.1 percent. Its 13.5 percent under the FairTax. Since the

FairTax would preserve the purchasing power of Social Security benefits and also provide a tax

rebate, older low-income workers who will live primarily or exclusively on Social Security
http://snipurl.com/kotcomparetaxrates


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would be better off. As an example, the average remaining lifetime tax rate for an age 60

married couple with $20,000 of earnings falls from its current value of 7.2 percent to -11.0

percent under the FairTax. As another example, compare the current 24.0 percent remaining

lifetime average tax rate of a married age 45 couple with $100,000 in earnings to the 14.7

percent rate that arises under the FairTax.

Further, perJokischa and Kotlikoff (circa 2006?)

once one moves to generations postdating the baby boomers there are positive welfare gains

for all income groups in each cohort. Under a 23 percent FairTax policy, the poorest members

of the generation born in 1990 enjoy a 13.5 percent welfare gain. Their middle-class and rich

contemporaries experience 5 and 2 percent welfare gains, respectively. The welfare gains are

largest for future generations. Take the cohort born in 2030. The poorest members of this

cohort enjoy a huge 26 percent improvement in their well-being. For middle class members of

this birth group, theres a 12 percent welfare gain. And for the richest members of the group,

the gain is 5 percent.

The robust growth of consumption, since the Great Depression, has been relentless. As a tax base, itseems far superior to current wage (indiv) /current year (business) earnings. The added bonus is that itwould be, essentially, self-regulating: the more one spends, the more tax is paid. And gone, for good,the the many tax shelters that are available to the rich, only.

Seer September 24, 2007 at 7:50 am

To all those who say that WW2 was a economic disaster: under what criteria? Of course(private)consumption fell during that period, but war production is a form of public consumption, sooverall consumption rose. Arguably, the investments in mass production and R&D during the war setup the period of high growth after the war.

MikeP September 24, 2007 at 8:27 am

To all those who say that WW2 was a economic disaster: under what criteria?

There are two ways an economy can recover from a depression: (1) the economic capital isreallocated and remade to produce things that consumers want, or (2) consumers are convinced towant what economic capital finds easy to produce.

War does the latter. Certainly, beating the daylights out of Germany and Japan is a second bestsolution to economic depression. Nonetheless, it is preferable to getting the daylights beat out ofyourself. During World War II, consumers wanted war production and the placement of valuable laborin foxholes. Calling it a recovery, however, means paying too much attention to numbers and too littleattention to what people actually want.

Russ Nelson September 24, 2007 at 9:34 am

Can we agree that Krugman needs his PhD revoked? Or at least have an asterisk next to his name,

saying Not an actual economist.happyjuggler0 September 24, 2007 at 11:11 am

Barkley,
http://blog.russnelson.com/http://snipurl.com/kotftmacromicro


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marginalrevolution.com/marginalrevolution/2007/09/the-great-compr.html

I maintain that my hypothesis that the big jump in individual income after the 1986 tax act was in factdue to the 1986 tax act, and that that was because people were legally handling their incomesomewhere other than on their individual income tax forms.

What is your alternative hypothesis? That the reduction in federal headline taxes paid from 50% to28% spurred people to work harder a la what Art Laffer and the WSJ predicted? In other words, thatReaganomics worked as advertised? If so, then I dont see how this increase in inequality is a bad

thing, it is merely spurring our most productive people to work where before they chose to be idle.They arent depriving anyone of anything by working harder, on the contrary they are tradingsomething valuable with the rest of us that otherwise wouldnt have existed, and thus by revealedpreference is a good thing for the other 99% of us.

Or are you going to simply say that that massive surge in inequality was a random event that justhappened to coincide with a major tax act that had as a major part of its intent the notion that individualincome would now be reported as individual income? Cough.

I can see why someone on the economic Left would want to try such a head in the sand approach, but

it is a glaring flaw in Krugmans notion of increased inequality. However I dont think it is wise for us toallow him to simply finesse away this issue, not if we are going to radically readjust our countryseconomic policy towards redistributionism like he wants us to.

mobile September 24, 2007 at 11:38 am

I think Steve Sailer was suggesting that immigration might have contributed to income inequality since1968, but not so much prior to 1924. The difference in income between the average American andaverage immigrant before 1924 was not as large as it was after 1968.

8 September 24, 2007 at 12:51 pm

Immigration increases the size of the total economy, but the biggest gains go to the immigrants, thosewho own capital, and star professions, like sports, finance, and entertainment. But they werent theonly new participants. Women entered the workforce in large numbers as well.

Rich people were sheltering their income post-New Deal while middle class Americans earned highwages because labor force participation was restricted. In the 1970s, immigration surged and womenentered the workforce in large numbers. In the 1980s, the tax shelters disappeared.

Matt Festa September 24, 2007 at 1:34 pm

It would do wonders here to do a simple google search. I found this paperhttp://ideas.repec.org/p/nbr/nberwo/3817.html

The structure of wages narrowed considerably during the 1940s, increased slightly during the 1950sand 1960s, and then expanded greatly after 1970. The era of wage stretching of the past two decadeshas been a current focus, but we return attention here to the decade that was witness to anextraordinary compression in the wage structure. Wages narrowed by education, job experience,

region, and occupation, and compression occurred within these cells as well. For white men, the 90-10differential in the log of wages was 1.414 in 1940 but 1.060 in 1950. By 1985 it has risen back to its1940 level. Thus the recent widening of the wage structure has returned to it a dispersion characteristicof fifty years ago. We explore various explanations for the rapid compression in the wage structureduring the 1940s and for its maintenance during the subsequent decade or more. We first assess the
http://ideas.repec.org/p/nbr/nberwo/3817.htmlhttp://www.increasing-returns.blogspot.com/


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hypothesis that the Great Depression left the wage structure in 1939 more unequal than in the late1920s, but we find evidence to the contrary. World War II and the National War Labor Board sharesome of the credit for the Great Compression. But much belongs to a rapid increase in the demand forunskilled labor at a time when educated labor was greatly increasing in number. These same factorscaused the wage structure to remain compressed until its expansion during the past two decades.

I do not think this bodes well for Krugmans policy hypotheis. But I think Ks hypothesis is more

political than economic.

liberty September 24, 2007 at 2:08 pm

Can we all agree that a strong and vibrant middle class is vital to the national good? And, can we allagree that the middle class has gotten smaller since, say, the beginning of the Viet-Nam war?

No, and no.

granted the serfs of 100 years from now will be much better off than they were in Tsarist Russia

Maybe we need another cataclysmic war that will require the rich to pay for it and that will restrict thelabor markets to a point that pay for workers will have to rise

You would like to see a massive war, with millions of deaths come about in order to deplete theresources of the well off, reduce supply of workers and compress incomes so that it appears moreequal.

I would like to see the poor who are not serfs at all, but are free continually increase theirpurchasing power just as they have been over all these years, via markets and entrepreneurship,without war and death and regulation. Growth helps the poor technology helps the poor in real terms,

cheap products help the poor and everyone else by increasing their standard of living. Whether it lookslike the middle spectrum is broader or more condensed is really irrelevant to me. The absolutepurchasing power of the worst off and of the median are all that matters and they continue to rise.

alexandre delaigue September 24, 2007 at 3:50 pm

10. How about this for an alternative story: Crush the incomes at the top and then make the fat catspay much higher wages to protect the world and become a superpower. Impose wage and pricecontrols as well. See how long it takes before these distributional effects which dont exactly matchthe distribution of economic talent reverse themselves in the aggregate. Im not sure thats right but at

least it seems to match more of the history.

Thomas Piketty has analysed the french great compression in this book, which I think has not beentranslated into english :

http://www.amazon.com/Hauts-revenus-France-XXe-si%C3%A8cle/dp/2246616514/ref=sr_1_13/002-6391551-3706433?ie=UTF8&s=books&qid=1190661795&sr=8-13

He shows that the first part of the chart is the same in France as in the US. Mostly, french top incomeswere reduced in the 30s and the 40s by the great depression, the war economy, and war destructions.But then, top incomes did not come back to their prewar level, and have roughly stayed this way untilnow : this is why french inequality is now lower than in the US, it has (mostly) not reverted.Piketty explains this with changes in tax policy. After WW2, France adopted a high level of
http://www.amazon.com/Hauts-revenus-France-XXe-si%C3%A8cle/dp/2246616514/ref=sr_1_13/002-6391551-3706433?ie=UTF8&s=books&qid=1190661795&sr=8-13http://www.econoclaste.org/http://economicliberty.net/


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progressive income tax, and high inheritance taxes, compared to what prevailed before. For Piketty,these tax changes explain why inequality remained low in France, countering the process in which highincomes become family fortunes. Tax policy changed in the US during the early 80s, the progressivityof income taxes, especially, decreased. The same happened in the UK, with the same effect : a rise ofthe share of top incomes.So following Piketty, you have it right for the first part of the story : middle class america was createdby the war economy and the depression, not by new deal policies. But Krugman has it right on the

second part : what he calls the great divergence came from politically-driven changes in theprogressivity of income and inheritance tax, not from a reversion to a normal tendency.

Allan September 25, 2007 at 12:47 am

Liberty,

No, I dont want to see another stupid war that might destroy the economy. Oops, about four yearslate for that.

I did not say the poor were serfs now. I said that, if something doesnt change, they may well be in100 years.

Do you really believe that a vibrant middle class is not vital to the economy? And you think the upperand/or the lower classes have gotten smaller in the last 40 years (that would have to have happened ifthe middle class shrank).

Rising tides may lift all boats. But it helps to first have a boat.

jacob September 26, 2007 at 1:39 pm

As the only industrial game in town, US companies could afford to pay its workers more, as they hadlittle to no competition

Rose December 28, 2007 at 8:21 pm

Hi! .

February 13, 2008 at 9:54 am

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chensu October 23, 2008 at 11:50 pm

now if you want to you can search for and and to trans the wordswho can help me?

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12/17



Good and Plenty: The Creative Successes of American Arts Funding

Judge and Jury: American Tort Law on Trial

Markets and Cultural Voices: Liberty vs. Power in the Lives of Mexican Amate Painters (Economics,Cognition, and Society)

The Voluntary City: Choice, Community, and Civil Society (Economics, Cognition, and Society)

Creative Destruction: How Globalization Is Changing the World's Cultures

Changing the Guard: Private Prisons and the Control of Crime
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13/17



What Price Fame?

In Praise of Commercial Culture

Entrepreneurial Economics: Bright Ideas from the Dismal Science

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14/17



Bradford DeLongCafe HayekCheep TalkChris Blattman's blogConfessions of a Supply-Side LiberalConscience of a LiberalCoordination Problem

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15/17



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16/17



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17/17


Defensible conclusions from observing UK fiscal policyGMOs and pesticide use (an email from Greg Conko)Words of wisdomAssorted linksAnthem: Ayn Rands Dystopian MasterpieceWill Ohio States football team decide who wins the White House?The nature of UK austerity

There is a great stagnation*The Bretton Woods Transcripts*

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