Links
Archives
Monday, February 27, 2006
|
The Etiology of the Harvard Money Manager Intriguing opinion piece this morning from Paul Krugman, in which he says “It’s time to face up to the fact that rising inequality [in America] is driven by the giant income gains of a tiny elite, not the modest gains of college graduates.” Krugman rightly notes the sentimental appeal of everyone believing that a college degree will increase opportunity and income and thus undermine inequality: “[It’s] comforting,” he writes, to imagine that “it’s all about returns to education,” since it suggests that “nobody is to blame for rising inequality, that it’s just a case of supply and demand at work. And it also suggests that the way to mitigate inequality is to improve our educational system - and better education is a value to which just about every politician in America pays at least lip service.” But Krugman also notes that “the real earnings of college graduates actually fell more than 5 percent between 2000 and 2004. Over the longer stretch from 1975 to 2004 the average earnings of college graduates rose, but by less than 1 percent per year.” In fact, all the big income gains in the country have occurred at the very highest income distribution percentiles: [I]ncome at the 99th percentile rose 87 percent; income at the 99.9th percentile rose 181 percent; and income at the 99.99th percentile rose 497 percent. No, that’s not a misprint. We’re into $30 million per year Harvard money manager territory here, the world of gangrenous greed. |