The top chart shows the GINI coefficient, which is the most common measure of income inequality. So without further ado, here are two charts based on CBO income figures: There are two reasons: (a) they collect a broad set of income figures, including capital gains and means-tested benefits, and (b) they include figures for the top 1%, which is where inequality has risen the most. The single best set of numbers for income inequality come from the CBO. This cut me to the core, but there's truth to it and it's worth showing you why. In comments last night, skeptonomist accused me of rarely being interested in showing income inequality. McCabe ended up paying a "small amount" of money. The New York Times reports that Comey had to spend $5,000 on accountants' fees to eventually learn that he had overpaid his taxes by $347. POSTSCRIPT: Even if the IRS finds nothing, these kinds of audits are expensive and time consuming. It sure sounds like the good old days of Richard Nixon made a comeback in the Trump era, doesn't it? But if you believe that, I have a swamp and a bridge and some cryptocurrency you might be interested in. What a coincidence! Needless to say, everyone denies everything. Two years later, McCabe was also chosen for a rectal probe audit.
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In 2018 Trump fired Comey's assistant, Andrew McCabe, 26 hours before he qualified for his full pension. A year later Comey was chosen by the IRS as a lucky recipient of the rectal probe version of a tax audit, an audit so intensive and so rare that the odds of being chosen randomly are astronomical.īut still, stuff happens. In 2017 Donald Trump fired FBI Director James Comey because he was pissed off over Comey's investigation of him. I'm just passing it along to help us all understand some of the thinking that goes on in the Eccles Building these days. Is he right? That's above my pay grade, and only future revisions of GDI and GDP will tell us which one was actually more accurate. We need to take more aggressive action, like the big rate increase the Fed announced a few weeks ago. It's growing at a normal rate.Īnd that, in turn, means that we can't count on a slowing economy to rein in inflation. He believes that GDI is more consistent with other economic indicators at the moment, which means the economy isn't slowing down all by itself.
So why did I go through all this? Just to give you the background to a recent set of remarks from James Bullard, president of the St. According to GDI, it grew at an annual rate of 1.8%. Take a look:Īccording to GDP, the economy shrank last quarter at an annual rate of 1.6%. Still, a discrepancy of 3.4% is a lot, and it affects what we think of economic growth. So which one is right? GDP is normally considered the more reliable measure because its components are easier to measure. In other words, GDI was 3.4% bigger than GDP. The statistical discrepancy is usually on the order of 1-2%, but for the past year it's been rising well above its norm. Here's what that looks like over the past few years: If these are supposed to be the same thing, why is GDP only $24.4 trillion compared to GDI at $25.2 trillion? As you'd guess, it's impossible to measure all the components of GDP and GDI precisely, so there's always a statistical discrepancy. Here's a table that shows the main components of GDP and GDI:
That's called Gross Domestic Income, or GDI. It's calculated by adding up the value of all the goods and services produced in the United States.īut you can calculate the same number by adding up all the income needed to produce this stuff. Buckle up, I've got an exciting post for you today!Īs you know, Gross Domestic Product is the size of the economy.