Tag: Inequality

Contributor Post Created with Sketch. 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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Contributor Post Created with Sketch. 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:


Contributor Post Created with Sketch. 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.


Contributor Post Created with Sketch. 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.)


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?


Contributor Post Created with Sketch. Class Warfare, in the Air and on the Ground

olgaru79 / Shutterstock.com

From the Economist, a report on studies about how economic privilege creates corruption:

Cycling one morning over the East Bay Hills, Professor Dacher Keltner had a near-death experience. “I was riding my bike to school,” he recalls, “and I came to a four-way intersection. I had the right of way, and this black Mercedes just barreled through.”


Contributor Post Created with Sketch. 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.


Contributor Post Created with Sketch. 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:


Promoted from the Ricochet Member Feed by Editors Created with Sketch. 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:


Contributor Post Created with Sketch. 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.


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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: More

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Contributor Post Created with Sketch. 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:


Contributor Post Created with Sketch. 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?


Contributor Post Created with Sketch. 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.


Promoted from the Ricochet Member Feed by Editors Created with Sketch. 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.”


Contributor Post Created with Sketch. 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.


Promoted from the Ricochet Member Feed by Editors Created with Sketch. Still More on the Piketty Wars


Piketty_in_CambridgeResponding to Thomas Piketty’s response (linked here) to the charges raised by the Financial Times, Chris Giles notes that there remain concerns with Piketty’s presentation:

There are a few things on which we agree. First, the source data on wealth inequality is poor. I have written that it is “sketchy” and Prof Piketty says it is “much less systematic than we have for income inequality”. Second, it would have been preferable for Prof Piketty to have used a more sophisticated averaging technique than a simple average of Britain, France and Sweden to derive an estimate for European wealth inequality. Third, the available data suggests a broad trend of reduction in wealth inequality during most of the 20th Century.


Promoted from the Ricochet Member Feed by Editors Created with Sketch. The Piketty Wars Continue


shutterstock_130262303Thomas Piketty has now come out with a substantive response to the criticisms issued by Giles and Giugliano in the Financial Times. I am glad that he has done so and I suspect that there is much to chew over in the response, so I will look forward to reading the response of others to Piketty’s defense. For the time being, let me offer the following somewhat random observations (I am not going to comment on every paragraph or sentence in the letter, though I have read it all. I certainly encourage readers to read it all as well):

— Piketty tells us that he “certainly agree[s] that available data sources on wealth inequality are much less systematic than what we have for income inequality.” I am glad he states so; it is nice to establish that the data sources for wealth inequality are sketchy and incomplete. But while Piketty tells us that he is sure the data set can be improved, he also claims that he “would be very surprised if any of the substantive conclusions about the long run evolution of wealth distributions was much affected by these improvements.”