AEIdeas

The public policy blog of the American Enterprise Institute

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Discussion: (16 comments)

  1. Vic Volpe

    You have a red herring argument on income inequality that diverts attention from the real issue. The income inequality is due to a failure to share (and I am not saying equal sharing) productivity gains in the nation over several decades (since the late ’70’s) among all who work in the economy. This has resulted in a concentration of wealth in a small proportion of the population with its resultant politicial influence — and led to a status quo mentality for maintaining the “system” as is. This underminds our democratic ways. [That is how the financial system, concentrated in the New York metro area, got bailed out to the tune of trillions of dollars. Dollars which came from the rest of the nation and is why much of the nation has been in an miasma for several years while Wall Street has been enjoying their bonuses.] Got it?

    1. thedrickster

      Got it? Well no, actually.

      If I may, you seem to be implying the root issue is not so much income inequality per se but rather the disparate political influence that concentration of accumulated incomes provides.

      So even conceding this point, the solutions generally put forth by indviduals sharing your view to most issues of the day, would seemingly exacerbate the problem you identified. These solutions of course all sharing a common charectertistic of consolidation/centralization of power at the Federal Level.

      In fact we are all now reaping the fruits of national democracy of which the founders explicitly warned.

      So rather than attacking legitimate free enterprise, why not focus on the root issue. Consolidation of power, ill conceived/illicit subsidies of all stripes and moral hazard?

      1. Vic Volpe

        You obviously have me confused with being a Liberal.

        1. thedrickster

          I very well may have. That said, it doesn’t invalidate the broader point.

    2. Exactly! Did you see the March Consumer Confidence report released this morning,it was not pretty.With a raging bull market why would we have a recessionary level Consumer Confidence report.Because Main st is not benefitting from this QE induced bull run,it is going to the top not trickling down.Plus I believe it is making gasoline prices higher than they would otherwise be by weakening the value of the dollar.Gasoline is killing the middle and lower classes making them feel poorer even while the Dow is at 14,500.

  2. “Arizona had the second-highest income inequality in the nation between 2008 and 2010, trailing only New Mexico for the gap between its richest and poorest residents, a new report says.”

    http://www.eastvalleytribune.com/money/article_d646e3f0-3095-11e2-a1d0-0019bb2963f4.html

    Hmm, common denominator anyone?

  3. Vic Volpe

    The ideal versus perception and reality.

    http://www.youtube.com/watch?v=QPKKQnijnsM&feature=share.

  4. I like Jim’s writing but I already know what studies he’s going to use when making his case about income equality. It’s not wrong but it’s cherry picking. Get a liberal economist,aren’t they all, and they’d come up with different stats. There is income inequality and it’s getting worse. Better be born into a good zip code with great connections.

  5. matt nettleton

    Income equality as a whole is misleading would it not be more interesting to know how many hours of work were trade for food clothing housing and government in 1950 versus 2012 and also how much of the difference is born by the rich versus the poor

  6. A WISE old man once said:
    “The worst form of inequality is to try to make unequal things equal” -Aristotle
    It still holds true today and in perpetuity, for it is the law of nature that not two things are or will ever be by themselves equal, be that human, social, financial, etc.
    The rest is ink-wasting…

  7. Todd Mason

    Winship’s central theories strike me as assuming facts not in evidence as well. That today’s family has a much higher standard of living than its 1950s counterpart does not prove that inequality is a red herring. For one, it takes two workers per household to make the nut today. For another, consumer debt was in its infancy in 1950. Are we better off because we are in hock to degrees that Grandad would consider unthinkable?

    His other point, — that wage growth outstripped productivity in the post-war period because of unionization, and is now reverting to mean — is also speculative. To describe capital vs labor as cyclical assumes that the US is a closed system, which it clearly is not. The construction industry soaked up an army of unskilled labor in the latter years of Winship’s comparisons. When will it do so again?

    The line Mr P draws to sacred investment income is also shaky. The economy is awash in unused capital. It is stirrng again because of the first glimmers of demand. in cars and now in the housing market.

    1. “Are we better off because we are in hock to degrees that Grandad would consider unthinkable?”

      So “we” should have listened to Grandad instead of Paul Krugrman.

      “The construction industry soaked up an army of unskilled labor in the latter years of Winship’s comparisons. When will it do so again?”

      Probably never as long as the open borders crowd continues to allow Mexico to outsource her poverty to the United States.

  8. LeftCoastObjectivist

    Is the “problem” inequality of income, or of wealth? Again, there’s a moral assumption that separates the left and right in the discussion. The core of the left believes that property is theft and profit is exploitation. If so, then any accumulated wealth and resulting inequality is per se evidence of immorality. Redistribution becomes about punishing the wealthy, not about benefits to the poor. This evidence will fall on deaf ears

  9. theBuckWheat

    Income “inequality” is the excuse that liberals (er, now “progressives”) use to destroy the very productivity that we rely on to advance society. Just who, exactly, are they complaining about? For example, do we fret about the difference in compensation between what Oprah earns and what she pays the person who runs the studio cameras? Do we worry about the “inequality” of between how much Jay-Z makes for a single concert compared to how much he pays the roadies to unload his equipment truck? Not a peep. So who, exactly, is the fixation of this horrible crime? What percent of the “1 Percent” are making too much? And who has made it by breaking a law or by insulting moral values? Please, inquiring minds want to know.

  10. Roy Platz

    When I was poor, I wasn’t worried about income inequality at all. I was interested in improving my standard of living & improving my income. People making more than me did not prevent me from improving my standing. They helped by creating jobs & value.

  11. “Income inequality” is a meaningless statistic that is just used by those with a political agenda. It relies on the false assumptions that there is a fixed supply of income that gets divided up amongst society by some central authority, and that society is divided into fixed classes (“the rich,” “the poor,” “the middle-class,” etc…). The reality is that the various income quintiles are just statistical brackets that have no reflection on the actual flesh-and-blood human beings who make them up and who move into and out of these different quintiles all the time. And income is not something that is produced in some fixed supply that then must be divided up amongst society, it is simply what one earns in exchange for whatever they produce.

    The reality is that inequality is at the lowest point in human history. Never before has the level of wealth held by the average person been so great. Wealth is the goods and services produced by a society. The more and more goods and services that become available to the average person, the wealthier those people are. Today, everyone is wealthy, just unequally wealthy.

    The unequally wealthy is the part that the Left focus on in their complaints about supposed increasing inequality.

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