Shorters

someone has been making me feel all pleasant and non-snarky, but that doesn't mean Megan should get a pass.

More Thoughts on the Health Care Surtax:

But at some point, that changes. In the highest paying zip codes, the effective average combined tax rate (not the marginal rate) on many affluent people is already well over forty percent--I shelled out more than 40% of my really non-lavish journalist's salary when I lived in Manhattan. The repeal of the Bush tax cuts will push some taxpayers into the 50+percent total tax bracket. Is America ready?

For tax rates that were exceeded for roughly half of the last century? Yes.
She still thinks the fact that rich people try not to pay their fair share means they shouldn't have to pay, too.

CIT RIP:

Did you know this particular collapse of a financial giant might affect my holiday shopping options? Holy fuck!

On Income and Consumption Inequality:

I broadly agree with Will that consumption inequality, not income inequality, is what matters. If the rich have access to broad classes of goods that the poor can't have, I find this worrying. On the other hand, if the problem is that Bill Gates has a really awesome 80 inch flat panel television, while the poor have to be content with a 32 inch CRT, well, I can't say my heartstrings are plucked very tight by this injustice. So it's important to know what the real differences are.

Dear stupid, what about access to, say, the latest medical treatments, versus getting to die of cancer?

income inequality figures exclude both taxes and government benefits. Things like the EITC and Section 8 vouchers really have made a quite substantial improvement in the ability of the poor to consume.

....


Sorry, I blacked out after hitting my head too hard. Section 8 housing means poor people can live next to rich yuppies and totally live like them, because it comes with an extra 2 grand a month that, by law, has to be spent frivolously.

So I don't think we actually know how much of a difference consumer credit made to equalizing consumption between rich and poor. I suspect that the continued mechanization of formerly labor-intensive tasks has made a greater difference, but then you'd expect me to say that. The data we want will not be available for several years, especially since period immediately following the financial crisis will be very atypical*, and therefore not useful in assessing the longer term trend.
* Before you accuse me of cherry-picking, I expect that the data following the financial crisis will actually show income and consumption inequality falling, because financial crises tend to make bigger relative cuts in the income of the wealthy. That doesn't mean that they "suffer more" in any meaningful sense--losing 5% of a $30,000 annual salary is almost certainly a greater hardship than losing 25% of $300,000. But the numbers will still show shrinkage.

How charitable of her. Btw, my own anecdotal experience says that rich people are consuming about the same amount, while spending less, because prices on many luxury consumables have fallen. Cash is king at times like this, and who do you think has it?

Markets in Everything:

I'm skeptical of this, not because I feel that political groups are above selling their services, but because I'd be shocked if one of them was actually stupid enough to put it in a letter. On the other hand, crazier things have happened.

But it's a market, so it's ok.
Also, does that selection have three hands, or one?

Learning to (un)Love Leverage:

A story about Megan:

"Equity," he solemnly informed me, after a few minutes of bewildered guessing. "Debt payments are capped. Equity has unlimited upside, while debt payments are capped. [sic - close that quote, Megan]
This is conventional wisdom at America's business schools, and over the next few years, I definitely lived it. We borrowed money for school, for living expenses, for books. I bought a car, went skiing, went to Mexico on spring break. Why shouldn't we? We were "consumption smoothing"; in a few years, we'd be making more than $100K, so why not spend a little of that now?

Obviously, this was fucking stupid. Spending money you hope to theoretically earn in the future is idiotic enough, especially from people looking to manage money as a career, but to borrow that money at a high rate of interest from a credit card company? Jesus fucking fuck.
And then the plot thickens. Remember back when Megan complained about being poor after school and wearing clothes that weren't brand new high end labels while living at home in Manhattan, rent free, always with cash in her pocket?

I didn't get that $100,000+ job I was expecting; I ended up in journalism, making less than half that. My loan payments ate up something like 45% of my take-home, which made it extremely difficult to live.

Poor, poor wannabe yuppie. And still, she was cheerleading for an economy that basically ran on the same premises the whole time. What a trooper.
She has also called working in journalism a charitable endeavor, because it isn't paying her like the imaginary job she felt entitled to by dint of being Megan McArdle.
Thank god being wrong means you're an expert on the topic, otherwise it'd be the case that this woman has nothing to offer.