rich poor gap
folks just don't understand the rich poor gap. folks want this to be a nice simple number they point to and say GOOD! or BAD! but it's not. the classic error is to look at it in absolute terms. if last year the poor made $5 and the rich made $500 the gap was $495. if this year they make $6 and $600 the gap is $594. it went up, BAD! but wait. the ratio is the same. so the gap hasn't changed, GOOD! the next error is to not include the cost of living. $4 last year. $5 this year. these numbers should be subtracted from all incomes. there's no effect on the absolute gap. but the effect on the ratio is substantial. the gap has increased by 20%. BAD! confused? you won't be after the next episode. ;->