Tag: Inequality

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Paul Stinchfield offered on another topic about Biden and guns: It (fatality rate) is not disproportionate in relation to the rate at which black men commit crimes, but one of the demands of “equity” activists is that actual crime rates should be ignored when it comes to arrest and punishment: either lots of black criminals […]

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Economic shutdowns accentuate inequalities. COVID-19 may not discriminate its victims by income, but the stringent policies our government takes undoubtedly do. The lockdown disproportionally impacts lower-income families and deepens economic inequalities at work and at home. Unequal in Work Preview Open

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One Way ‘Abolishing Billionaires’ Would Undermine Silicon Valley and America’s Entrepreneurial Ecosystem

 

Sundar Pichai, Chief Executive Officer of Alphabet, speaks during a session of the 50th World Economic Forum (WEF) annual meeting in Davos, Switzerland, January 22, 2020.

I mean, so what if a wealth tax took half of American billionaire wealth over the next decade or so? Or what if it took more? All these folks would still have plenty left to spend — which is why some democratic socialists would prefer a much, much lower wealth cap. As a policy adviser to Rep. Alexandria Ocasio–Cortez has said, “If you have $5 million, you can live off the interest of that and be a one-percenter. There’s nothing in this world that anybody wants or needs to do that you can’t do with, let’s say, $10 – 15 million.”

Nor should we worry that vast wealth confiscation would hurt innovation and entrepreneurship — what economists Emmanuel Saez and Gabriel Zucman call “extreme business success.” Most rich and successful entrepreneurs would be, well, still rich and successful entrepreneurs before getting hit by the billionaire tax. As the two inequality researchers put it, “Established businesses typically devote a lot of their resources to protect their dominant positions by fighting new competition. A progressive wealth tax hits wealthy owners who have already established their businesses while it does not affect (yet) new emerging businesses.”

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As I mentioned in my last post, foreign and domestic progressives think America stands as the main stumbling block to the global peace and utopia that might just lay around the bend. I used to think that most of the world thought of America as the big bully or at least that in every conflict […]

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Inequality Is Exploding, Except That It Might Not Be

 

A long piece in The Economist about inequality research (“Economists are rethinking the numbers on inequality”) ends with this question: “Will this flurry of new research change people’s minds about inequality?” Well, maybe some change among some academics, probably not much among most activists or politicians. As for the latter, too much of the current political environment seems driven by the idea that massive inequality signals “late capitalism” and the end of the American Dream as we know it. Mostly on the left, but also on the populist right.

But even if minds are hard to change, perhaps strong evidence can at least make certain beliefs less strongly held. Has income inequality surged to record levels? As the below chart shows, adjusting for taxes and transfers finds the income share of America’s top 1 percent “has barely changed since the 1960s,” The Economist points out. From the piece:

Meritocracy Is Not the Problem

 

George Packer’s recent jeremiad in The Atlantic offers an object lesson on the disarray of modern progressive thought. Packer’s essay, about K-12 education in New York City, rails against two enemies: “a brutal meritocracy and a radical new progressivism,” which, he argues, are ripping apart the social fabric of New York City. His exhaustive lament, detailing his and his wife’s desperate effort to navigate a broken system for their two children, lacks any systematic analysis of the institutional forces driving the problems he identifies. He also never questions his deep faith in an enlightened social welfare state.

He begins the essay pointing to the painful experience of parents who spent a cold February night in sleeping bags outside the schoolhouse door in order to obtain places for their children in a desirable public preschool whose slots are awarded on a first-come, first-served basis. Packer attributes this extreme behavior to the “organized pathologies of adults” who have surrendered to the brutal meritocracy.

But he does not ask why similar instances do not occur in school districts outside New York City. A good place to start is with the law of supply and demand. New York constrains supply of seats in charter schools by an iron set of political forces. Old private schools are hard to expand and new ones are even harder to create.  The shortage of good schools is well understood by parents who think a night in the cold is a good investment in their children’s future. There is no bidding system for existing seats. Nor is the City able to expand the supply of desirable school seats in the short run.

The Undue Alarmism over America’s Wealth Inequality ‘Crisis’

 

At least the fantastical Green New Deal attempts to address an actual problem: climate change. That’s less obviously the case with various new tax proposals meant to solve America’s “wealth inequality crisis.” Evidence that America’s ever-expanding stock of wealth has become concentrated in fewer hands isn’t itself evidence of a crisis. Nor does “tolerating extreme inequality mean accepting that it’s not a gross policy failure,” as inequality researchers Gabriel Zucman and Emmanuel Saez recently wrote.

In what way is it a policy failure if extraordinary wealth is derived from the rise of innovative companies (who invest as if their continued existence depends on it) that sell gadgets and services that we greatly value?  (Which is more the case than it used to be. The opposite trend, one that favored inheritance or cronyism, is what would be alarming.) How is it, given this reality, that the more billionaires there are and the richer they are, the worse things are? More, please. (It’s also worth pointing out Zucman’s much-cited data shows wealth inequality has drifted lower the past few years. Likewise, income inequality has slowed markedly over the past decade.)

And what is that policy failure, exactly, when the story of wealth inequality is largely one of housing inequality? Is the solution legally suspect and administratively challenging wealth taxes or tackling land-use regulations that deter housebuilding and generate fat returns for homeowners? Granted, the latter provides much less cathartic punch for those in need of such emotional release.

On this week’s episode of Banter, Brookings Institution Senior Fellow Richard Reeves discusses his book “Dream Hoarders: How the American Upper Middle Class Is Leaving Everyone Else in the Dust, Why That Is a Problem, and What to Do About It.” The book argues that the top 20 percent of income earners in America are increasingly passing their status to their children, reducing overall social mobility for the bottom 80 percent. “Dream Hoarders” received considerable attention upon its release in 2017. Check out the links below for more information including a review of the book by AEI Director of Economic Policy Studies Michael Strain.

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Welcome the to the HLC podcast for September 26, 2017; It’s the Trump and the SOBs edition of the podcast with your hosts, Hartford radio talk show host Todd Feinburg and Boston nanophysicist Mike Stopa. This week we will discuss the NFL protest of, um, of, oppression of African Americans in our society. Right? That’s what it is all about, right? That’s what Colin Kaepernick said at the beginning of all this…right?

So here’s the deal. Trump is at a rally. He is meandering as is his wont. He says that he doesn’t like those NFL prima donnas kneeling and disrespecting the National Anthem and he thinks the NFL owners should fire the SOBs who do. He say what tens of millions of Americans in homes and bars across America have said in exactly the language in which they have said it. And the media – per usual – goes ballistic. Because, they didn’t know that millions and millions of Americans think just that? Or they thought that here is another chance to slap down the idiots who hold the popular sentiment on this matter?

Two-Percent Growth Is a Loser for the Angry Middle Class. But Where’s the GOP Solution?

 

shutterstock_123756013The good news is that the economy is growing at 2 percent and that there’s no recession in sight (barring a complete collapse of profits). The bad news is that the economy is growing at 2 percent. It’s been doing so for nearly 15 years under Democratic and Republican administrations.

Coming off a deep recession, real GDP growth is averaging no better than 2 percent. After 25 quarters of so-called recovery under Obama, it has increased a total of only 14.3 percent.

Compare this to earlier periods. After the JFK tax cuts of the early 1960s, the economy grew in total by roughly 40 percent. After the Reagan tax cuts of the 1980s, the economy grew by a total of 34 percent.

Are Many Americans Really Some of the Poorest People in the World?

 

Anti-poverty group Oxfam has published a report making some flashy claims about global inequality. Among them: Just 62 individuals had the same wealth as 3.6 billion people — “the bottom half of humanity” — an estimated $1.76 trillion. Also, the richest of the rich are hiding $7.6 trillion in a “global network of tax havens.”

Now apparently one of Oxfam’s main data sources was a wealth report from the bank Credit Suisse. Note this chart from the report showing which regions have what share of rich and poor and in between:

Dealing with Wealth Inequality

 

“A society that puts equality before freedom will get neither. A society that puts freedom before equality will get a high degree of both.” — Milton Friedman

Wealth inequality is the crux of modern progressivism and democratic socialism. They contend that free-market capitalism moves wealth to the top — leaving the rest at a loss for cash — and that the government must intervene to redistribute wealth from the bloated top to the destitute bottom. This is for good reason: It lends itself to scary-looking graphics such as this:

Will Democrats’ Populist Obsession with Inequality Be Their Downfall?

 

tightrope_inequality_populism_democrats_economics_2020_500x293President Obama says America’s greatest challenge is the income gap. A 74-year-old “democratic socialist” is the Democratic Party’s hottest star. And the party’s almost certain presidential nominee hedges on whether she’s a capitalist.

The party’s leaders are hardly without popular support for these stances. In a New York Times poll last summer, 83 percent of Democrats surveyed said government should deal ASAP with the income gap, with large majorities favoring higher taxes on the rich and Wall Street.

The Democratic Party clearly has an inequality obsession. But have liberals gone too far? “Yes,” Republicans would surely say, while probably adding a zinger about “class warfare” or some such.

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I have little doubt that Zipf’s Law is not new to a great many Ricochetois, considering how many of y’all have brains the size of planets, but it was a new concept for me when I clicked on this highly fascinating YouTube video from VSauce: Preview Open

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7 Myths About Scandinavia’s Social Democratic ‘Paradise’

 

hiker-on-mountain-shutterstock-500x293If Scandinavia didn’t exist, the left would have to invent it. Overall, Denmark, Norway, and Sweden are known as nations that combine big government with good economic growth. Low levels of inequality and poverty with high levels of innovation. Social democratic models for America, some Democrats suggest.

But in “Scandinavian Unexceptionalism: Culture, Markets and the Failure of Third-Way Socialism,” Nima Sanandaji argues that all these wonderful qualities of Scandinavian society “predated the development of the welfare state” and that “all these indicators began to deteriorate after the expansion of the Scandinavian welfare states and the increase in taxes necessary to fund it.” Some key points:

1.) Left-leaning pop stars, politicians, journalists, political commentators and academics have long praised Scandinavian countries for their high levels of welfare provision and for their economic and social outcomes. It is, indeed, true that they are successful by most reasonable measures. However, Scandinavia’s success story predated the welfare state. Furthermore, Sweden began to fall behind as the state grew rapidly from the 1960s. Between 1870 and 1936, Sweden enjoyed the highest growth rate in the industrialised world. However, between 1936 and 2008, the growth rate was only 13th out of 28 industrialised nations. Between 1975 and the mid-1990s, Sweden dropped from being the 4th richest nation in the world to the 13th richest nation in the world.

Was the 1990s Clinton Economy Really That Good?

 

I was on Bill Bennett’s always-excellent “Morning in America” radio program today, and a caller asked me — basically — to provide talking points on why the 1990s Clinton economic boom “wasn’t really that good.” (The caller probably wanted ammo against liberal coworkers or relatives when they used Bill Clinton’s economic record as reason to support Hillary Clinton.) My response  was, “Well, the Clinton years really were pretty good!”

How could I say otherwise? Why would I say otherwise? The economy grew by nearly 4% annually during the Clinton years, creating 24 million jobs and driving the unemployment rate to a superlow 3.9%. Incomes and stocks were way up, inflation and interest rates were way down. Budget deficit? What budget deficit?

On Bernie Sanders, Spray Deodorants, Innovation, and Child Poverty

 

SandersIn my new The Week column, I look at the Bernie Sanders charge — one also leveled by Elizabeth Warren — that the US economy is an immoral, rigged game. (A funny thing to say, I think, about an economy that produces more billionaire entrepreneurs than any other large, advanced economy.) Another stellar effort by me, of course. Yet on second thought, I sort of wish I had focused on this bit of odd economic analysis by socialist Sanders:

You don’t necessarily need a choice of 23 underarm spray deodorants or of 18 different pairs of sneakers when children are hungry in this country. I don’t think the media appreciates the kind of stress that ordinary Americans are working on.

The WaPo’s Jim Tankersley writes that the “literal implication of that last sentence is that there some kind of a national trade-off between antiperspirant/Air Jordan variety and food for children.” Which of course is silly. Demos’ Matt Bruenig thinks there is a deeper point that Tankersley misses: “Whenever someone argues that we should distribute the national income more evenly so as to reduce poverty and inequality (as Sanders does), the very first thing someone says in response is that doing so will reduce growth and innovation. Sanders is mocking this argument, saying he’d gladly cut poverty and inequality even if it meant a reduction in superficial product innovation.”

Philosopher: Loving Families Perpetuate Injustice

 

shutterstock_91954007Down in Australia, social justice thinking exists on a far more advanced plane than up here in the benighted, backwoods, bitter-clinging USA. Just to take one example, here are a couple of Aussie philosophers on Australian radio, bemoaning the fact that children raised in loving families receive unfair advantages in life – advantages that perpetuate social and economic inequality. Says one of the philosophers:

“The evidence shows that the difference between those who get bedtime stories and those who don’t—the difference in their life chances—is bigger than the difference between those who get elite private schooling and those that don’t.”

He continues:

How do Republicans Think About Income Inequality? How Should They? 5 Key Points

 

great_recession_inequality_shutterstock_022515It’s not just left-wing progressives and Occupy Wall Street remnants who think US income inequality is a problem. A large 2014 Pew poll found that about two-thirds of Americans think the income gap has gotten worse and that government has a role in reducing that difference. Even 45% of Republicans think government should do something.

But do what exactly? Noam Scheiber in The New York Times summarizes research that found just 13% of wealthy Americans said government should “reduce the differences in income between people with high incomes and those with low incomes.” And only 17% percent said the government should “redistribute wealth by heavy taxes on the rich.” (Also, according to a different study, the wealthy view the income gap as reflecting the results of individual choices and mistakes rather than larger forces.) The rest of America, on the other hand, finds more appealing the idea of tax-driven redistribution. Scheiber points to a 2013 Gallup poll that found by 52%-45% Americans think wealth should be more evenly distributed with 52%-45% favoring tax hikes on the wealthy.

How will the next US president see things? The same as their donors, according to Scheiber: