Taxing The Rich Won’t Alleviate Income Inequality

Increasing taxes on the rich may be a fiscal policy worth talking about, but it won't make the poor richer.

The two themes that seem to be coming out of the pundits who are sympathetic to the Occupy movement (as opposed to the movement itself, which remains a befuddled miasma of causes with no coherent message) are the twin ideas of income inequality and increasing the taxes on the “rich,” as we saw in things like the so-called Buffett Rule which President Obama proposed in September, but never really bothered to turn into a concrete proposal. Accepting for the sake of argument that these are both legitimate issues, Ross Douthat reminds us this morning that taxing the rich, whatever merits it might have with respect to fiscal policy won’t do anything about income inequality:

From the drum circles of Zuccotti Park to the hustings of Barack Obama’s re-election push, a suddenly invigorated liberalism thinks that it has the answer to this angst: a renewed demand for higher taxes on America’s richest 1 percent. And if all you care about is reducing measured income inequality, then the Occupy Wall Streeters and their Democratic admirers have it right. Tax millionaires sufficiently and you’ll end up with a more equal society. The tallest poppies will be trimmed, and some of their income will find its way to someone’s else pocket.

But true social mobility and broadly shared prosperity are not so easily achieved. Remember that those tax dollars, once collected, would not be disbursed with perfect effectiveness to the most deserving members of the American middle class. Instead, they would be used to buy a little more time for our failing public institutions — postponing a reckoning with unsustainable pension commitments, delaying necessary reforms in our entitlement system and propping up an educational sector whose results don’t match the costs.

More spending in these areas won’t necessarily buy us more mobility. The public-sector workplace has become a kind of artificial Eden, whose fortunate inhabitants enjoy solid pay and 1950s-style job security and retirement benefits, all of it paid for by their less-fortunate private-sector peers. Some on the left have convinced themselves that this “success” can lay the foundation for a broader middle-class revival. But if a bloated public sector were the blueprint for a thriving middle-class society, then the whole world would be beating a path to Greece’s door.

Our entitlement system, meanwhile, is designed to redistribute wealth. But this redistribution doesn’t go from the idle rich to the working poor; it goes from young to old, working-age savings to retiree consumption, middle-class parents to empty-nest seniors. The Congressional Budget Office’s new report on income inequality points out that growing Medicare costs are part of the reason upper-income retirees receive a larger share of federal spending than they did 30 years ago, while working-age households with children receive “a much smaller and declining share of transfers.” Absent reforms, this mismatch will only grow more pronounced: by the 2030s, Medicare recipients will receive $3 in benefits for every dollar they paid in.

Then there’s the public education system, theoretically the nation’s most important socioeconomic equalizer. Yet even though government spending on K-to-12 education has more than doubled since the 1970s, test scores have flatlined and the United States has fallen behind its developed-world rivals. Meanwhile, federal spending on higher education has been undercut by steadily inflating tuitions, in what increasingly looks like an academic answer to the housing bubble. (If the Occupy Wall Street dream of student loan forgiveness were fulfilled, this cycle would probably just continue.)

Douthat is largely correct here. There may be perfectly good reasons to increase taxes on higher income earners that relate to the Federal Budget deficit. Additionally, as I’ve said here other times, the idea that tax increases should be ruled off-the-table in negotiations over a debt deal is as absurd of an idea as the idea that defense spending or entitlements should be off the table. If we’re going to get our fiscal house in order, and we need to if we want to avoid the problems that Europe is facing now at some point in our own future, then we need to have everything on the table, including comprehensive tax reform that is likely to mean that higher income earners pay more even if their rates go down. That’s not ideology, it’s political reality and plain old common sense because politically we’re never going to be able to bring the budget under control with only spending cuts or only tax increases, it’s going to take a combination of the two.

What makes for smart fiscal policy, though, doesn’t necessarily do anything to deal with income inequality, or the lack of mobility that the economy has experienced in recent years. As Douthat notes, taxing the rich doesn’t put money in the hands of the poor, it puts in the hands of the government, who then transfers it to any one of a number of politically favored groups. Right now, the biggest government-controlled wealth transfers go from the relatively poor young to the typically better-off retired, and that’s a phenomenon that’s only going to accelerate as the Baby Boomers retire. If anything, that is going increase income inequality regardless of what we do about taxes on the “rich.”

Moreover, it’s simply a lie that taxing the rich is going to do anything to help the poor in the long run. It’s a lie built on simplistic notions of egalitarianism, the notion that people who have succeeded have done so nefariously, and the idea that there’s just something wrong with being “too rich,” whatever that means. It works politically for the same reason that populism and appeals to envy have always worked, and it’s totally wrong. The government can’t make people equal. In fact, if the Occupy Wall Street crowd were paying attention, they’d realize that it’s government manipulation of the economy that has created the very inequality they complain of. And yet, they have the illusion that the solution to their perceived problems is more, and bigger, government.

Douthat suggests an alternative:

The alternative to this liberalism should not, however, be the kind of reverse class warfare currently being championed by the not-Romney candidates in the Republican field, whose flat-tax fantasies would ask working Americans to bear more of the burden for public institutions that have been failing them for years.

Rather, it should be a kind of small-government egalitarianism, which would seek to reform the government before we pour more money into it, along lines that encourage upward mobility and benefit the middle class. This would mean seeking a carefully means-tested welfare state, a less special interest-friendly tax code, and a public sector that worked for taxpayers and parents rather than the other way around.

The devil, as always, is in the details but, considering that what we’ve been doing for the last 40 years or so clearly isn’t working perhaps it’s worth looking into.

FILED UNDER: Congress, Deficit and Debt, Economics and Business, US Politics
Doug Mataconis
About Doug Mataconis
Doug Mataconis held a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010 and contributed a staggering 16,483 posts before his retirement in January 2020. He passed for too young in July 2021.

Comments

  1. Stan says:

    I don’t object to rich people doing well. What bothers me about our present situation is that low and middle income people are treading water or sinking. If the federal government had more revenue, enough to eliminate our deficit or bring it down to a manageable level, it could start repairing our infrastructure, which would add construction jobs. It could fund programs for prenatal and infant medical care, to lower our infant mortality rate. It could provide aid for nursery schools and child care, thus freeing mothers for work and helping their kids as well. It could do more to relieve the debt burden of college graduates and it could provide more aid to enable low income students to attend community colleges and universities. It could follow the suggestions of conservative economists like Marty Feldstein and Glenn Hubbard to provide mortgage relief to underwater homeowners. Most of these items would benefit low and middle income people preferentially, and would help the economy and our sense of national cohesion. And if we had a government that did these things, I wouldn’t mind a bit if the rich stay rich.

  2. Gustopher says:

    Well, if you want to ignore the vast majority of what the OWS folks are saying, you could reduce it all down to “tax the rich”.

    I think it’s pretty clear that the main message isn’t “tax the rich”, but that government needs to do more to help the middle class — we’re losing the middle class, young people who did everything “right” are discovering that there aren’t any jobs, middle class families are discovering that they really were just a few paychecks from disaster, families cannot move to where jobs are because their mortgages are underwater and they cannot sell, health insurance costs are rising out of control, the infrastructure is crumbling and collapsing, and we’re being told that we cannot afford to keep America as it was — that America’s best days are behind her — all the while the government is bending over backwards to help the very wealthy.

    It really is all about the middle class. If there are 5 job seekers for every available job, no amount of hard work and personal responsibility is going to get more than one of those five a middle class job. In the meantime, we are building up a huge class of people who have been unemployed for years, and through no fault of their own will permanently go from middle class to poor.

    The American story of the past 60-70 years — work hard, and you’ll be alright in the end and your kids will do better than you — stopped working. And the government is only interested in solving the problems of the top 1%.

    I suppose you could call that “tax the rich”, if you really felt like misrepresenting it.

  3. Hey Norm says:

    Enough with the drum circle slur.

  4. john personna says:

    Inequality can be a justification for a progressive tax rate, especially when it does not end equality.

    What are you Doug, some kind of Leveler?

  5. garretc says:

    I don’t think anybody is arguing that all we need to do is tax the rich and all our problems will go away. Seems a little strawman-ish to me to suggest that’s really the case. I don’t follow much media coverage, so maybe that’s what the media has been hyping through all this, but that’s all anybody seems to want to talk about these days in relation to government: taxes.

    Sure, getting some more revenue from those who can afford to part with it would be nice, but there’s a whole host of other things that need to happen to our government and society before we can say that we’ve solved anything.

    Also, what specific actions are you referring to with this quote: “they’d realize that it’s government manipulation of the economy that has created the very inequality they complain of.”? Because, unless my grasp of recent history is fuzzy (which I’m not saying isn’t a possibility), but it seems like most of the “government manipulation of the economy” leading to income inequality has stemmed from the self-proclaimed defenders of the free-market, the GOP.

  6. MBunge says:

    “Ross Douthat reminds us this morning that taxing the rich, whatever merits it might have with respect to fiscal policy won’t do anything about income inequality”

    Then the fact that income inequality was so much less when the rich paid more in taxes and exploded at the same time the tax burden on the rich was dramatically decreased is what? A bizarre coincidence for which there is no reasonable explanation?

    For pity’s sake, even if it does absolutely nothing to increase income for the poor, raising taxes on the rich will reduce income inequality BECAUSE THE RICH WILL HAVE LESS MONEY. Now, you may not think that reducing the income of the rich will have any other positive impact, but if you say that it will not effect income inequality that only demonstrates you don’t know what the words “income” and “inequality” mean.

    Douthat’s not a total moron like Jonah Goldberg, but can the NYT please give his spot to Daniel Larison so at least we can get stuff that isn’t plagued by the most elementary flaws.

    Mike

  7. john personna says:

    @MBunge:

    Then the fact that income inequality was so much less when the rich paid more in taxes and exploded at the same time the tax burden on the rich was dramatically decreased is what? A bizarre coincidence for which there is no reasonable explanation?

    I think the trick is to turn the argument on its head.

    We can have a more progressive tax rate, Mr. Scrooge McDuck, and you can still the richest guy in the room.

  8. george says:

    I got the feeling that a lot of what is being at the OWS isn’t so much “tax the rich”, as “don’t bail out the rich”.

    And I think they have a point. Bailing out Wall Street was the wrong thing to do on so many levels – not the least of which is the message it sends out. If rich bankers can screw up and be bailed out why not everyone else? I don’t think there’s a good answer to that.

  9. Moosebreath says:

    Doug,

    Sorry, but both Douthat and your comments are silly. Unless the money raised by taxing the rich is then turned around and handed back to the rich, then it reduces inequality. It really is that simple.

    Moreover, when the taxes are spent on items which in the long run will help the poor and middle classes (like education and social welfare programs and even to pay the salary of teachers and policemen who are being laid off throughout the country) it certainly reduces inequality.

    ” considering that what we’ve been doing for the last 40 years or so clearly isn’t working perhaps it’s worth looking into.”

    You’re right. Cutting taxes on the rich and reducing programs designed to help the poor haven’t worked well for the last 30+ years. It’s time to try something else, like what worked so much better in reducing inequality during the 5 decades before Reagan was elected.

  10. superdestroyer says:

    Ever progressives favorite president, Bill Clinton, ended welfare as we know it and was praised by both Democrats and Republicans for it. Now the Democrats and espeically the OWS types want to go back to welfare as we used to know it.

    Look at all of the OWS types who want guaranteed incomes, free college education, free healthcare, free housing, free child rearing.

    What people need to understand is all of the community organizers and free lance writers believe that they should have the same standard of living as engineering, nurses, physicians, and accountants while getting to have all of the free time they want.

  11. michael reynolds says:

    Yet another example of how far right wing intellectuals will debase themselves to serve their owners. Er, masters. Lords? I’m not quite sure what the proper and polite term is. Betters?

    So raising taxes on the rich can’t possibly result in better health care for poor people? Can’t result in another inner city teacher keeping her job? Can’t result in a lower debt being passed along to be paid for by future generations of middle class workers?

    Lick that boot. Lick it good and clean.

  12. superdestroyer says:

    @michael reynolds:

    RAising taxes on anyone just makes the nanny state bigger, makes the core groups of the Democratic Party more pwoerful, and makes life harder for the middle class and higher.

    If the money would be spent to lower the budget deficits while the government is cutting other spending, it could be sold to the middle class. But as Michael stated above, increased taxes will just be used to increase spending and the $1 trillion dollar budget deficit will still exist. Thus, the private sector will get smaller while the public sector grows.

    Do progressives really want the U.S. to have the same economy as the Mediterranean states that are all on the verge of default?

  13. WR says:

    I think Doug’s post makes perfect sense, unless you are completely unwilling to ignore every fact of the last sixty years of American history.

    In other words, it’s the perfect Libertarian argument — it all holds together with absolute consistency unless you’ve ever visited the real world.

    I begin to wonder if Doug lives in that bottled miniature city in Superman’s Fortress of Solitude…

  14. Modulo Myself says:

    @WR:

    You mean you don’t remember Ronald Reagan’s inaugural quote?

    “Government is not the problem; government is the solution to our problems.”

    It’s clear that we need some deregulation, union-busting, welfare-hating, and government-killing to get us out of the forty-year tailspin set in motion by the naive liberals of the Reagan era.

  15. Console says:

    Typical bait and switch. For the OWSers society is screwed up now, and here comes Douthat bitching about how they need to be focused on entitlement reform (and bizzarely enough apparently a bunch of 20 something college grads need to be dismayed with the educational system according to Douthat). Yeah, the problem is that deficits will be big in 2030 because of medicare. That’s the real issue facing america /sarcasm.

    You want ideas, one of the biggest reducers in inequality in america would be single payer health insurance. That alone would help wage stagnation. But either way, absent specific policy proposals, the calculation is rather easy. Raise revenue, spend it on social programs. Red herrings about what’s going to happen to the budget decades from now will fall on deaf ears. (excuse the mixed metaphor) because the reality is that we’ve been taxing people less and pulling up the social ladders at the same time.

    Mataconis ends this post with talking about what we’ve been doing for the past 40 years. But in all reality the past 40 years have involved this stupid neoliberal pursuit of dismantling the great society and the new deal while at the same time lamenting the failure of the great society and new deal to create a utopia. At some point, conservative ideologues (i.e. the douthats of the world) have to get accept some accountability about the way society has ended up. And they need to stop pretending the real problem with the US is that entitlements will cost at lot 30 years from now.

  16. An Interested Party says:

    The devil, as always, is in the details but, considering that what we’ve been doing for the last 40 years or so clearly isn’t working perhaps it’s worth looking into.

    Ouch…poor Doug…are you sure you don’t want to revise that statement?

  17. Moderate Mom says:

    You can make the rich a little less rich by increasing their taxes, but it won’t make the poor any less poor or add to the paychecks of the middle class.

    The fact that Warren Buffet has a whole lot of money, or Bill Gates, or the late Steve Jobs, or any other wealthy individual doesn’t alter my life one iota. The only thing that makes a difference in my economic life is how hard I work and that I continue to make responsible financial decisions.

    Rather than pegging increases in income inequality to changes in tax rates, perhaps looking at the effects of globalization and our trade deficits might be more pertinent. Everyone seems to want to buy cheap stuff, and it’s cheaper to produce it someplace other than the United States.

  18. superdestroyer says:

    @Console:

    1/6 of the workforce in the U.s. works in healthcare. Single payer would lower the pay of most healthcare workers in the U.S. and set up a system where the rich go to boutique hospitals and the rest of us are waiting in line hoping that a health care provider will talk to us.

    Why should be who get up in the morning and go to work have a lower level of healthcare that the hipsters, slackers, and wannabes that populate the OWS. And yes, the healthcare for workers would be worst since they will be last in line behind people who do not work.

    Nationalized healthcare would turn hospitals and doctors offices into the equivalent of the large, urban school systems. Rahm Emanuel will not end up waiting in line due to single payer than Rahm Emanuel’s children will never attend a public school.

  19. Dazedandconfused says:

    I really don’t think cutting poor peoples SS and Medicare on the basis of those programs creating massive deficits while at the same time insisting on maintaining historically low tax rates on the uber-wealthy is going to fly. I feel bad for those who must try to make that case.

    Taxing the rich by itself doesn’t fix the main problem, which IMO is the shifting from an economy that employs a lot of people to a financial-markets based one. Somehow, the wealth pooling in the casinos must be used to employ people again. Taxing it away and having the government distribute it is a terrible idea to contemplate , but perhaps not nearly as terrible as doing nothing. We are always six missed meals from a revolution.

  20. Console says:

    Yeah, 1/6 works in healthcare. Meanwhile 6/6 have to find a way to pay for healthcare.

    I think I’ll take that tradeoff. Unless you’re willing to argue that that rising healthcare costs actually make our economy healthier.

    Whine all you want about healthcare quality, it’s not like you’re going to Duke or John Hopkins to everytime you get sick. Reality is that the system is still segregated by rich and poor… you just end up paying a lot more for mid level healthcare than you would in a place like Canada.

  21. Stan says:

    @superdestroyer: You’re projecting your own fears onto the Occupy Wall Street demonstrators or you’re making an argument you don’t believe in because you think it’s effective. Believe me, it isn’t.

  22. James in LA says:

    From superdestroyer: “What people need to understand is all of the community organizers and free lance writers believe that they should have the same standard of living as engineering, nurses, physicians, and accountants while getting to have all of the free time they want.”

    This is simply rank jealousy, and represents the core of most of your arguments. Just say “dirty hippie” and be done with it. Your fixation on the how many pennies the serfs earn blinds you from the larger picture. The difference between a doctor and a freelance writer is doodly-squat compared to salaries and bonuses running into the tens of millions of dollars.

    Income inequality as it stands cannot last. For the first time in my living memory, rich people have fallen out of favor. Not richness, but the current crop of rich people have clearly worn out their welcome, having achieved their gains through unmolested greed and manipulation, and producing absolutely nothing of value in return. They are nothing that anyone wants to aspire, not with a straight face.

    Perhaps we could agree that lasting change must begin with the seating of grand juries to ask where our money went? No jobs, no perp walks make Homer something, something…

  23. Stan says:

    @Moderate Mom: I’d like to keep our present economic and political system, and I think the only way of doing so is to insure that as many Americans as possible have the opportunity to lead a decent life. Thirty years ago people with below average wages collectively earned twice as much money as the top 1%. Now they’re equal. What will things be like thirty years from now? If this trend continues, the people at the top will have complete control of the government through their political contributions and the people at the bottom will have little opportunity to better themselves because higher education will be even more out of reach than it is now. If we reach a stage like this, will American democracy survive?

  24. Stan says:

    @superdestroyer: This hasn’t happened in France or in Canada. Both countries have democratic political systems and both countries have conservative parties. If their medical systems were so bad, they would have been scrapped long ago. If you disagree, kindly explain your reasoning.

  25. WR says:

    @Moderate Mom: ” The only thing that makes a difference in my economic life is how hard I work and that I continue to make responsible financial decisions.”

    Right. And when the CEO of the company you work for cuts your pay and slashes your benefits, then takes that money, keeps most of it for himself and doles the rest of it out to stockholders, as long as you work hard, there’s no effect at all.

    It’s fine if you want to pretend to be this stupid, but please don’t insult us by expecting people not to see through your crap.

  26. sandra says:

    No but it will help. There only one way to fix this country. If you are an American you have to Read “Common Sense 3.1”

    That is all!

  27. gVOR08 says:

    Well, taxing the rich may not cure all the world’s problems, but it might help a little. And given the obvious, that this whole “supply side”, “trickle down”, “wealthy job creator” thing is self serving BS, there’s no downside to taxing them.

  28. Tsar Nicholas II says:

    School vouchers, right to work laws, merit-based tenure in public eduction, no collective bargaining rights in public education, lower taxes on small businesses, tort reform, no federal minimum wage, environmental reform, shorter periods for unemployment insurance benefits and a balanced federal budget. That’s the recipe for making the poor a helluva lot richer.

  29. ponce says:

    That’s the recipe for making the poor a helluva lot richer.

    Tsar Nicky,

    There’s a place where all your wingnut ideas: a small, weak government, low taxes, lax gun control laws, religious instruction in the schools, no abortions, etc., etc., have been implemented:

    Afghanistan.

  30. Ron Beasley says:

    Supply side economics – lowering taxes on the wealthy – was a scheme to transfer wealth from the bottom and the middle to the top and it worked. The Bush tax cuts created zero jobs but continued to transfer wealth to the top and created a bubble that burst – the reaction was to bail out the rich who created the problem and do nothing for the victims. So that all indicates we are supposed to believe you Doug when you tell us that raising the taxes on the wealthy to save a few safety nets won’t help reduce the income gap? If you wanted to read fantasy you should have chosen Tolkien over Rand.

  31. The Colourfield says:

    @Tsar Nicholas II:

    As usual, not one piece of evidence to back it up.

    At least you’re consistent.

  32. CONCRETEBLUE says:

    ” Rather, it should be a kind of small-government egalitarianism, which would seek to reform the government before we pour more money into it, along lines that encourage upward mobility and benefit the middle class. This would mean seeking a carefully means-tested welfare state, a less special interest-friendly tax code, and a public sector that worked for taxpayers and parents rather than the other way around.

    The devil, as always, is in the details but, considering that what we’ve been doing for the last 40 years or so clearly isn’t working perhaps it’s worth looking into.”
    wow. Just wow. So DM and Douthat are officially blind squirrels. First, Douthat: This is exactly, in a nutshell, whaT THE ows IS ABOUT!
    n And DM: Of COURSE what has been going on the last 40 years has not worked! Cutting top tax rates on individuals and corporations leads to profit taking and gambling, NOT investment! Want to see the American economy revive itself? Raise corporate tax rates and taxes on earnings above 1mil. to confiscatory levels. Money that would have been paid out in bonuses and dividends will be reinvested in Rand D, higher wages, etc, stimulating the economy, raising consumer demand, lower unemployment, and yes, less income inequality! Reading DM reminds me of Bugs Bunny: “What a maroon!”

  33. superdestroyer says:

    @Stan: @Stan:

    The progressives have had the policy for increasing the numbers in the lower classes and shrinking the middle class. Open borders and unlimited immigraiton has not helped the middle class. Encouraging fertility increases of the poor while discouraging fertility of the middle and upper middle classes have not helped the middle class. Forced busing had not helped the middle class. Downgrading public schools has not helped the middle class. The abandoning effective law enforcement from 1960’s to the 1980’s did not help th e middle class.

    If you want to help the middle class, the idea of open borders coupled with massive entitlement spending is not going to help.

  34. superdestroyer says:

    @Ron Beasley:

    Ron the tax cuts did not cause the economic problems as much as the lack of real investment opprotunities in the U.S. When there is no reason to investment in manufacturing, R&D, or technology, then too much money ended up chasing returns in real estate.

    Of course, the real question is that if taxes are increased along with adopting tougher enviroment and employment regulation what will happen to the U.S. is open borders are maintain and entitlement spending increases. If Americans refuse to do blue collar jobs now, image what will happen when entitlement spending increases. The number of poor will increase and the U.S. spending of immigrants will become unsuntainable.

  35. Kit says:

    @Stan: Right on!

    Stan, after a quick scan of the replies I think you are the one who has put his finger on the real issue. Give a man $1,000 and he will pay off his credit card; give a man $1,000,000 and he will buy a fancy home and car; give a man $100,000,000 and he will go buy himself a senator. Looking at opinion polls, the country is not as divided as it would seem on Capitol Hill. I’d like to think that we could at least bumble through were the influence of Big Money to be cut back to levels seen in previous generations. The government has grown sclerotic and that suits the interests of the super rich to the detriment of the rest of us.

  36. john personna says:

    @Moderate Mom:

    The only thing that makes a difference in my economic life is how hard I work and that I continue to make responsible financial decisions.

    I don’t think anyone fully believes this, but the longer you live on this earth, the more you know it’s not true. Some people will have bad luck or madness, and some people will work hard, trying the wrong things again and again. The question from left to right always boils down to “what do you do with those people?”

  37. john personna says:

    I guess it’s especially ironic that in an economic system so dependent of failure (creative destruction) we maintain a cognitive dissonance that all it takes is “hard work:”

    The NFIB estimates that over the lifetime of a business, 39% are profitable, 30% break even, and 30% lose money, with 1% falling in the “unable to determine” category.

    Sure, we hope those 30% losers make it up somewhere else, or hit the long ball the next time out, but there isn’t actually a guarantee that they will.

  38. john personna says:

    @superdestroyer:

    How the heck can you argue a politics based on complete fantasy?

    Open borders and unlimited immigraiton has not helped the middle class.

    Open borders and unlimited immigration would mean loading up the flights from Hong Kong to Los Angeles all day, every day.

  39. sam says:

    @superdestroyer:

    The number of poor will increase and the U.S. spending of immigrants will become unsuntainable.

    Sooner or later, usually sooner, Supe gets around to brown (and black) peeps and the woe they’re gonna cause Whitey. That is some internal gyroscope — unbalanced instead of the other way.

  40. bandit says:

    Supe gets around to brown (and black) peeps

    Go back to your Klan meeting – you’re the only one talking about what color people are.

  41. matt b says:

    @john personna:

    I guess it’s especially ironic that in an economic system so dependent of failure (creative destruction) we maintain a cognitive dissonance that all it takes is “hard work:”

    Repeated because it is such an important truth to recognize.

  42. Liberty60 says:

    @Moderate Mom:

    The fact that Warren Buffet has a whole lot of money, or Bill Gates, or the late Steve Jobs, or any other wealthy individual doesn’t alter my life one iota.

    That simply isn’t true.

    Any one of the people you mentioned can meet personally with any President, Senator, or Governor and receive a sympathetic hearing on any issue.

    Can you?

    Any one of the people you mention could swing an election with their purchasing power of TV air time.

    Can you?

    Economic power = political power.

    the 1% not only have more money than us, they have enough political power to where the government can easily disregard the wishes of people like you.

    Do you really think that doesn’t affect your life one iota?

  43. CONCRETEBLUE says:

    @Liberty60: EXACTLY!

  44. LET ME HELP YOU:

    There has been no change in income inequality. NONE. ZERO.

    What has changed is the composition of households as women entered the workforce since 1983. Furthermore, people (women) have chosen ‘spatial freedom’ (to have their own house or apartment). Divorces have increased. People have delayed marriage. And we have seen vast immigration of third world labor. The composition of households has changed. It’s changed because households are less expensive, and so people are choosing to create new households. They PREFER TO SPEND MONEY ON SPATIAL FREEDOM because they have more money because everything is far cheaper than it was in 1980.

    THERE IS NO INCREASE IN INCOME INEQUALITY. IT IS A LIE. A FALSEHOOD. A MISTAKE.

    Whenever someone uses the word ‘Household’ in a measurement of economic data they are either wrong or intentionally deceptive. Period. End of story.

    I”M SORRY IF IT UPSETS YOU TO LOSE YOUR ARGUMENT BUT IT”S TRUE
    There is no increase in income inequality. It’s a flat line. We have exceptional data from 1994 to the present. And that exceptional data shows a flat line. No change in inequality.

  45. john personna says:

    There is a good long related article by Luigi Zingales called Who Killed Horatio Alger? (via MR)

    A couple good bits:

    To this day, Americans are unusually supportive of meritocracy, and their support goes a long way toward explaining their embrace of American-style capitalism. According to one recent study, just 40 percent of Americans attribute higher incomes primarily to luck rather than hard work—compared with 54 percent of Germans, 66 percent of Danes, and 75 percent of Brazilians. But perception cannot survive for long when it is distant from reality, and recent trends seem to indicate that America is drifting away from its meritocratic ideals. If the drifting continues, the result could be a breakdown of popular support for free markets and the demise of America’s unique version of capitalism.

    and

    This historical heritage is reflected in American attitudes today. Income inequality in the United States is among the largest in the developed world. Yet in a recent survey of 27 developed countries by the Pew Charitable Trusts, only one-third of Americans agreed that it was the government’s responsibility to reduce income inequality; the country with the next smallest fraction to agree was Canada, with 44 percent, and the responses rose as high as Portugal’s 89 percent. Americans do not want to redistribute income, but they do want the government to provide a level playing field: over 70 percent of Americans said that the role of government was “to ensure everyone has a fair chance of improving their economic standing.”

    This belief in equality of opportunity is supported by another belief: that the system is actually fair. Sixty-nine percent of Americans in the same survey agreed with the statement “People are rewarded for intelligence and skill,” a far larger percentage than in any other country. At the same time, only 19 percent of Americans thought that coming from a wealthy family was important for getting ahead, versus 39 percent in Chile, 53 percent in Spain, and a median response across all nations of 28 percent.

    I’m not sure I should speak for the leftists, but as a centrist I agree that hard work is of primary importance, but luck is a significant secondary factor. Bad luck, or the wrong “gifts” can undo a lot of hard work.

  46. Gerry W. says:

    @Curt Doolittle:

    I do not believe it is flat line. Sure there are internal factors, but when you have 2 billion cheap laborers added to the free market system since the fall of communism-you are going to have income inequality. Add to that automation and more loss of jobs and wages, six sigma and more loss of jobs and wages, and mergers and consolidation and more loss of jobs and wages. We are undergoing globalization and no one is dealing with it. We lost many jobs and job classifications. And if a factory closes down, you have to downgrade to lower pay if you can find a job. It is not only us in the U.S. but all over the world. Other country like Germany are using gimmicks, but even there, the unions have agreed to less wages-but at least there, they are more equal. We have more competition with hamburger chains and pizza chains, but there is no new industry unless you live in a high growth high tech area. Competition is fine in a growing economy, but if you give up 1/3 of manufacturing, then you are losing that upward movement. And no one has come up with a comprehensive plan that will create jobs and have an upward movement, that we once had.

  47. CONCRETEBLUE says:

    @Curt Doolittle: You say you have data? Please link to credible studies proving your assertions. Otherwise you are no more credible than Glenn Beck….

  48. Rob in CT says:

    We have exceptional data from 1994 to the present. And that exceptional data shows a flat line.

    Citation needed.

  49. CONCRETEBLUE says:

    Glenn Beck it is…..