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Friday, March 24, 2006
Krugman Responds to Secretary Snow's Assertions
Following up on yesterday's post regarding income inequality, Paul Krugman has an op-ed in today's NY Times in which he challenges Secretary Snow's recent comments on income inequality going down between 2000 and 2003. As Krugman points out, even though the economy grew fast in 2004, few families saw the benefits of this growth. Instead, the rich got richer. As he says, "Forbes tells us that the compensation of chief executives at the 500 largest corporations rose 54 percent in 2004." Most others he says, have not seen their incomes rise. He says:
I find it helpful to illustrate what's going on with a hypothetical example: say 10 middle-class guys are sitting in a bar. Then the richest guy leaves, and Bill Gates walks in. Because the richest guy in the bar is now much richer than before, the average income in the bar soars. But the income of the nine men who aren't Bill Gates hasn't increased, and no amount of repeating "But average income is up!" will convince them that they're better off.
Posted by Becky Lewis
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