Thomas Sowell discusses the top one percent, which, as he notes, changes significantly over time.
Greg Mankiw points out that people care about injustice rather than inequality per se.
A thought inspired by reading them together: The difference between wealth and income is underappreciated. ‘Rich’ and ‘poor’ might be used in either sense, but seem primarily to refer to wealth. The top one percent, as discussed in Sowell’s piece and the many others to which he responds, are those at the top of the income distribution. As he observes, people can have high incomes without having much wealth, and can have much wealth without producing much income. Income relates, not to wealth, directly, but to changes in wealth. Or, better, wealth is a function of the integral of income. Moreover, incomes change dramatically from year to year, especially at the extremes of the bell curve. There are significant changes in wealth, too—the turnover rate in the Forbes 400 is surprisingly high—but wealth is probably more stable than income (though fluctuations in the stock and housing markets can have sweeping impacts).
UPDATE: This controversy illustrates my point nicely. Barack Obama thinks that anyone earning $97,000 or more is rich. Hillary Clinton demurs; for her, ‘rich’ starts applying only at family incomes of $250,000 or above. But it’s absurd to define ‘rich’ in terms of income, let alone income levels such as these. To adapt one of Sowell’s examples: the person with a family income of $250,000 this year might be someone retiring from a $50,000 a year job who sold a small house in New York and moved to Phoenix. And plenty of couples earning $250,000 (not to mention $97,000) would be astonished to learn that they are rich.
Let’s use the two-and-a-half rule, and say that a family earning $250,000 buys a $625,000 house. Here’s what that gets them in Los Angeles:
These are fine houses, but they don’t look like residences of the rich, do they?
This reminds me of the day I stopped calling myself an independent. In 1981, Tip O’Neill declared that the Reagan tax cuts would mostly benefit the rich, and asserted that a relatively high percentage of the benefits would go to families earning over $40,000 a year. (That’s equivalent to roughly $80,000 a year today, using the GDP deflator, or $90,000, using the Consumer Price Index—not too far from Obama’s definition.)