Evidently the Democrats hope that flogging the
class warfare, uh, the growing inequality meme will enable them to
cling to their control of the U.S. Senate and put them in charge of
the House of Representatives. Over at the Washington Post
columnist Robert Samuelson takes on the rhetorical misuse of
inequality and makes the entirely sensible point that…
For starters, the poor are not poor because the rich are rich.
The two conditions are generally unrelated. Mostly, the rich got
rich by running profitable small businesses (car dealerships,
builders), creating big enterprises (Google, Microsoft), being at
the top of lucrative occupations (bankers, lawyers, doctors,
actors, athletes), managing major companies or inheriting fortunes.
By contrast, the very poor often face circumstances that make their
What kind of
circumstances? Not graduating from high school and having kids
before getting married.
A few weeks back, citing recent Congressional Budget Office data
I explained “Why
President Obama Is Wrong on Inequality“:
Are the rich getting richer? Yes. Are the poor getting poorer?
No. In fact, over the past 35 years most Americans got richer. Has
income inequality increased in the United States? Yes….
…from 1979 and 2010, the last year for which data are
available, the bottom fifth’s after-tax income in constant dollars
rose by 49 percent. The incomes of households in the second lowest,
middle, and fourth quintiles increased by 37 percent, 36 percent,
and 45 percent, respectively. The poor and the middle class got
Burtless then divides the households situated in the top fifth
of incomes into four groups: those in 90th percentile and below,
those in the 91st through 95th percentiles, those in the 96th
through 99th percentiles, and the top 1 percent. From 1979 to 2010,
incomes for those fortunate households increased by 54 percent, 67
percent, 79 percent, and 202 percent, respectively. The rich got
richer too, and they got richer faster.
Samuelson agrees. Parsing the CBO data a bit differently,
True, the top 1 percent outdid everyone. From 1980 to 2010,
their inflation-adjusted pretax incomes grew a spectacular 190
percent, almost a tripling. But for the poorest fifth of Americans,
pretax incomes for these years rose 44 percent. Gains were 31
percent for the second poorest, 29 percent for the middle fifth, 38
percent for the next fifth and 83 percent for the richest fifth,
including the top 1 percent. Because our system redistributes
income from top to bottom, after-tax gains were larger: 53 percent
for the poorest fifth; 41 percent for the second; 41 percent for
the middle-fifth; 49 percent for the fourth; and 90 percent for
Americans in the top 1 percent are convenient scapegoats. They
don’t naturally command much sympathy, and their rewards sometimes
seem outsized or outlandish. When most people are getting
ahead, they don’t worry much about this economic inequality. When
progress stalls, they do. There’s a backlash and a tendency to see
less economic inequality as a solution to all manner of problems.
We create simplistic narratives and imagine that punishing the rich
will miraculously uplift the poor. This vents popular resentments,
even as it encourages self-deception.
For more background see Reason.com editor Nick Gillespie’s
excellent column, “Why
Obama Can’t Solve Inequality” over at The Daily
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