Weekend Reads

For the profit and pleasure of subscribers, here's a few longer reads on economic, social and political issues for the weekend.

For people still shaking their heads over Trump's election, this piece from Patricia Cohen at the New York Times is instructive. It includes new research from a group including Thomas Piketty showing how 117 million Americans saw close to zero growth in their real incomes since the 1970s.

"Stagnant wages have sliced the share of income collected by the bottom half of the population to 12.5 percent in 2014, from 20 percent of the total in 1980. Where did that money go? Essentially, to the top 1 percent, whose share of the nation’s income nearly doubled to more than 20 percent during that same 34-year period," she writes.

"Mr. Piketty, Mr. Saez and Mr. Zucman concluded that the main driver of wealth in recent years has been investment income at the top. That is a switch from the 1980s and 1990s, when gains in income were primarily generated by working. That divergence can slow innovation and further entrench inequities, said Heather Boushey, an economist at the Washington Center for Equitable Growth. When labor income provides the primary route to riches, it creates incentives for people to improve their education and work harder, Ms. Boushey explained. But if getting ahead requires already having a stockpile of cash or inheriting a windfall from your parents, then it is much harder to work your way up."

Bob Davis covers the same territory in the Wall St Journal, but with a different twist. He points to research showing about half of American 30 year olds actually earn more than their parents did at the same age. That's down from over 90% in the early 1970s.

"Economists and sociologists from Stanford, Harvard and the University of California set out to measure the strength of what they define as the American Dream, and found the dream was fading. They identified the income of 30-year-olds starting in 1970, using tax and census data, and compared it with the earnings of their parents when they were about the same age," Davis writes. "In 1970, 92% of American 30-year-olds earned more than their parents did at a similar age, they found. In 2014, that number fell to 51%."

Further to the stories about fake news stories, the excellent Craig Silverman reports on an Ipsos poll done for Buzzfeed that found 75% of Americans thought the fake news they'd seen was actually true.

We're getting towards the end of the year so we're starting to see 'best of' lists popping up. This one from Bloomberg of the best news articles others have written is a cracker.

This is a long read from Nick Confessore at the New York Times Magazine on the whole business of hiding money in the offshore financial system. It is fascinating, and doubly so if you've been following the Panama Papers.

Wired's Mustafa El-Bermawy writes here about how 'Your Filter Bubble Is Destroying Democracy". There's more here from Roberto Stefan Foa and Yascha Mounk on how support for democracy is waning among the young, including in New Zealand. It's the most disturbing thing I've read in a long time.

Have a great weekend. And we're now less than a year out from an election...