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What Are Your Odds of Making It to the 1%? by Chelsea German

Your odds of “making it to the top” might be better than you think, although it’s tough to stay on top once you get there.

According to research from Cornell University, over 50 percent of Americans find themselves among the top 10 percent of income-earners for at least one year during their working lives. Over 11 percent of Americans will be counted among the top 1 percent of income-earners (i.e., people making at minimum $332,000) for at least one year.

How is this possible? Simple: the rate of turnover in these groups is extremely high.

Just how high? Some 94 percent of Americans who reach “top 1 percent” income status will enjoy it for only a single year. Approximately 99 percent will lose their “top 1 percent” status within a decade.

Now consider the top 400 U.S. income-earners — a far more exclusive club than the top 1 percent. Between 1992 and 2013, 72 percent of the top 400 retained that title for no more than a year. Over 97 percent retained it for no more than a decade.

HumanProgress.org advisory board member Mark Perry put it well in his recent blog post on this subject:

Whenever we hear commentary about the top or bottom income quintiles, or the top or bottom X% of Americans by income (or the Top 400 taxpayers), a common assumption is that those are static, closed, private clubs with very little dynamic turnover. …

But economic reality is very different — people move up and down the income quintiles and percentile groups throughout their careers and lives.

What if we look at economic mobility in terms of accumulated wealth, instead of just annual income (as the latter tends to fluctuate more)?

The Forbes 400 lists the wealthiest Americans by total estimated net worth, regardless of their income during any given year. Over 71 percent of Forbes 400 listees — and their heirs — lost their top 400 status between 1982 and 2014.

So, the next time you find yourself discussing the very richest Americans, whether by wealth or income, keep in mind the extraordinarily high rate of turnover among them.

And even if you never become one of the 11.1 percent of Americans who fleetingly find themselves in the “top 1 percent” of US income-earners, you’re still quite possibly part of the global top 1 percent.

Cross-posted from HumanProgress.org.

Chelsea German

Chelsea German

Chelsea German works at the Cato Institute as a Researcher and Managing Editor of HumanProgress.org.

Don’t Agree with the Mayor’s Politics? No Permits for You! by Walter Olson

Boston mayor Martin Walsh gives Donald Trump the Chick-Fil-A rush* over his immigration opinions. Via the Boston Herald:

If Donald Trump ever wants to build a hotel in Boston, he’ll need to apologize for his comments about Mexican immigrants first, the Hub’s mayor said.

“I just don’t agree with him at all,” Boston Mayor Martin J. Walsh told the Herald yesterday. “I think his comments are inappropriate. And if he wanted to build a hotel here, he’d have to make some apologies to people in this country.”

More on the use of permitting, licensing, and other levers of power to punish speech and the exercise of other legal rights at Overlawyered’s all-new regulatory retaliation tag. (And no, I’m not exactly thrilled with Mayor Walsh for making me take Trump’s side in an argument.)

* In case you’d forgotten the infamous Chick-Fila-A brouhaha, here’s Overlawyered’s coverage:

The uproar continues, and quite properly so (earlier here and here), over the threats of Boston Mayor Thomas Menino and Chicago alderman Proco (“Joe”) Moreno to exclude the Chick-Fil-A fast-food chain because they disagree (as do I) with some of the views of its owner.

Among the latest commentary, the impeccably liberal Boston Globe has sided with the company in an editorial (“which part of the First Amendment does Menino not understand?…A city in which business owners must pass a political litmus test is the antithesis of what the Freedom Trail represents”), as has my libertarian colleague Tom Palmer at Cato (“Mayor Menino is no friend of human rights.”)

The spectacle of a national business being threatened with denial of local licenses because of its views on a national controversy is bad enough. But “don’t offend well-organized groups” is only Rule #2 for a business that regularly needs licenses, approvals and permissions. Rule #1 is “don’t criticize the officials in charge of granting the permissions.”

Can you imagine if Mr. Dan Cathy had been quoted in an interview as saying “Boston has a mediocre if not incompetent Mayor, and the Chicago Board of Aldermen is an ethics scandal in continuous session.” How long do you think it would take for his construction permits to get approved then?

Thus it is that relatively few businesses are willing to criticize the agencies that regulate them in any outspoken way (see, e.g.: FDA and pharmaceutical industry, the), or to side with pro-business groups that seriously antagonize many wielders of political power (see, e.g., the recent exodus of corporate members from the American Legislative Exchange Council).

A few weeks ago I noted the case of Maryland’s South Mountain Creamery, which contends through an attorney (though the U.S. Attorney for Maryland denies it) that it was offered less favorable terms in a plea deal because it had talked to the press in statements that wound up garnering bad publicity for the prosecutors. After that item, reader Robert V. wrote in as follows:

Your recent article about the [U.S. Attorney for Maryland] going after the dairy farmers reminded me a case in New York state where the Health Department closed down a nursing home in Rochester. They claim is was because of poor care, the owner claims it was because he spoke out against the DOH.

The state just lost a lawsuit where the jury found the DOH targeted the nursing home operator because he spoke out against them.

According to Democrat and Chronicle reporters Gary Craig and Steve Orr, the jury found state health officials had engaged in a “vendetta” against the nursing home owner:

Beechwood attorneys maintained that an email and document trail showed that Department of Health officials singled out Chambery for retribution because he had sparred with them in the past over regulatory issues. The lawsuit hinged on a Constitutional argument — namely that the state violated Chambery’s First Amendment rights by targeting him for his challenges to their operation.

The Second Circuit panel opinion in 2006 permitting Chambery/ Beechwood’s retaliation claim to go forward is here. It took an extremely long time for the nursing home operators to get their case to a jury; the state closed them down in 1999 and the facility was sold at public auction in 2002.

Versions of these posts first appeared at Overlawyered.com, Walter Olson’s indispensable law blog, published by the Cato Institute. 


Walter Olson

Walter Olson is a senior fellow at the Cato Institute’s Center for Constitutional Studies.

Michael Moore and the 2nd Amendment by B.K. MARCUS

Would the left support gun rights over police monopolies? 

In the wake of the Baltimore riots and the latest charges of police violence against unarmed suspects, Oscar-winning filmmaker Michael Moore has called for disarming American cops, saying in his Twitter feed, “We have a 1/4 billion 2nd amendment guns in our homes 4 protection. We’ll survive til the right cops r hired.”

Is that an implicit endorsement of private individuals’ right to armed self-defense?

Probably not.

Moore, who became the darling of the gun-control movement in 2002 for the movie Bowling for Columbine, is an outspoken critic of the 2nd Amendment, saying that the Founders themselves would have excluded gun rights from the Constitution if they had known what firearms would become over the next two centuries:

If the Founding Fathers could have looked into a crystal ball and seen AK-47s and Glock semiautomatic pistols … I think they’d want to leave a little note behind and probably tell us, you know, that’s not really what we mean when we say “bear arms.”

It’s tempting, therefore, to dismiss Moore’s April 30th tweets as conscious hyperbole — perhaps confronting law-and-order types with the logic of their own support for gun ownership.

But if you look at the full set of Moore’s tweets on the subject, a consistent libertarian logic is evident:

  1. Government agents currently do more to endanger private citizens than they do to protect us.

  2. That oppression can only continue while the government holds a monopoly on armed violence.

  3. We need to shift the balance of power away from the state and back to the people.

Is that too much to read into one angry Twitter rant?

If Moore’s goal was to outrage the American public, he has certainly succeeded. Pro-police conservatives are jerking their knees at the far-left filmmaker’s provocations. But advocates of liberty can find at least a sliver of common cause with those who see the visible fist of government power in Baltimore and too many other American cities in recent months.

Many libertarians consider the police to be among the few legitimate roles for a night-watchman government; defense and security are necessary to protect the rights of individuals. But there is no question that the government’s most heavily armed agencies have grown well beyond the role of night watchmen, if that was ever really their function. And then there is the proliferation of armed agents to organizations like the Fisheries Office, NASA, the EPA, and the Department of Education.

As the sharing economy chips away at other cartels in our over-regulated economy, we need to accept that the police, too, need competition — and we have the opportunity right now to ally with many on the American left who are beginning to suspect the same thing.

When government agents hold a monopoly on the tools of violence, is it any wonder when they behave like a cartel? Privately owned firearms are part of the decentralized solution to both looting and the police violence that triggers the protests.

By allowing individuals to defend themselves, their homes, their businesses, and their communities from crime and rioting, they need not rely exclusively on police forces that may be ineffective or corrupt. (The famous defense of Koreatown by armed shop owners during the LA riots shows this principle at work.)

If you don’t recognize the right to armed self-defense in principle, you are either dogmatically opposed to private guns, or you think the question is pragmatic and that there is a calculus of trade-offs: which is more dangerous at the moment, armed citizens or a police monopoly?

There isn’t much say to dogmatists on the matter. But the question of practical trade-offs may resonate with those on the left who currently see the police less as protectors and more as a danger.

Would such an alliance evaporate as soon as our allies perceive themselves to be in power again? Probably. Moore doesn’t see the problem as permanent: “We’ll survive til the right cops r hired.”

But we have the opportunity right now to drive home the point that the government needs more than checks and balances within itself. The people must have the ability to defend themselves independently of the state, and that’s harder to do when the government has all the guns.

B.K. Marcus

B.K. Marcus is managing editor of the Freeman.