Saturday, February 7, 2015

Virtually everyone Megan McArdle knows

Update February 9: Hi to the cowpokes from Mike's Round Up!
Willem Haecht, Apelles Painting Campaspe, ca. 1630.
Apparently bloodthirsty rabble-rouser Josh Barro agrees with me that people who benefit from those 529 and Coverdell college savings programs that President Obama suggested taxing are not exactly middle class (as the Republican propaganda machine had it, forcing Obama to back down on the proposal), those who make $200,000 a year being in actual fact better off than 92 percent of the US population, and this makes Megan McArdle a tad uncomfortable, because, like,
Virtually everyone I know went to a selective college, and indeed, so did most of their parents. So it comes to seem as if preparing your children for the same must be the struggle of all people, rather than the province of a fairly privileged class ... 
It just stands to reason! I mean, if the middle class isn't everybody you know, than who is it?

Although even relatively poor people in Queens (median married-family income $74,248) do have to pay a lot of rent, unless they bought their apartments in 1988, or belong to McArdle's social circle.
Unless they grew up in the city, they also don't have the option of inheriting a home from their parents (which can't be that common, but nonetheless describes the situation of an actual majority of my city-born friends who are still living there).
And the reason you just can't get away from rich people in New York is that there are so damn many of them!
As Barro notes, New York City has a U-shaped income distribution: a lot at the top, a lot at the bottom, less than normal in the middle.
New York City does not have a U-shaped income distribution. Graph from Washington Post September 2009.
And all her poorer friends moved away:
The median-income folks who wanted to settle down in the old neighborhood and start a family but couldn't afford to all left, just like most of my friends.... friends with incomes similar to ours have done just that, since they are now priced out of our neighborhood.
Their incomes are similar to the McArdle family's, in that they too get paid in dollars.

Then there are the other 50-odd percent of the population, with family incomes under $50,000, but surely they all have rent control, or live in projects, right, so they have all sorts of disposable income that you just haven't got, with all their kids getting scholarships to Princeton (none of McArdle's friends had scholarships, of course), and practically no taxes, and Obamacare, which has been taking care of their medical needs since, oh, way back in 2014: whereas at $200K,
There's no financial aid for college unless your kid is a genius or an athletic prodigy; you have to pay full freight. Your taxes are much higher than those of people at the median. You probably get your health insurance through work, but if you don't, there's no subsidy. We could run through all the means-tested programs and progressive taxes out there, but they all point to the same conclusion: In New York City, exactly the same consumption package costs the $200,000 family a lot more than it does for the family making $70,000 a year.
You virtually have exactly the same income as a middle-class person, even though you take in three times as much money! Isn't that odd? But McArdle says so, and she's studied economics, or English, anyway, at Penn. (I thought most things in the consumption package were cheaper if you're rich, from meat, if you have a basement and a chest freezer, to mortgages, but I'm sure she's done the arithmetic, or at least pointed at the conclusion with her own personal finger.)

And that's not even counting the microplane grater, reference refrigerator magnet, salt pig, fish spatula, pizza mesh, spice-measuring spoons, non-stick egg pans, twine dispensers, egg separators, gravy separators, Kyocera ceramic slicers—
Like a lot of cooks, I’ve toyed with the idea of getting a mandoline, and maybe I still will one day. But they’re bulky and hard to store...
—butter boats, hand choppers, Trim-n-Turn rotating cake stands, Koolatron drink fridges, Rabbit corkscrews, Cuisinart electric kettles, digital deep fryers, gourmet whips (to be used on a gourmet threatening to chop your hand, I suppose), copper salt and pepper mills, electric smokers, and Supreme Sous Vide Demi Water Ovens, which the more common members of the other part of the middle class cannot maintain in their tiny winsome kitchens, though perhaps they do buy them to gift and regift around their tribal communities, like copperware and salmon planks and bearskins in the traditional Northwest Coast potlatch. I mean, who can even imagine what they do, or why would you want to?

Steampunk peppermill from Penn State Industries.

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