I have studied inequality way too much.\u00a0 I once ruined three months of my life sitting in the Boston Public Library in the 1970s, scanning microfilm of the 1875 Massachusetts State Census returns in order to measure wealth inequality.\u00a0 I eventually determined conclusively that most citizens had virtually no wealth and a few had a lot.<\/p>\n
Which begs the question: So what?\u00a0 The key driver of Gini Coefficients, the standard measure of inequality, is whether the top people in the income distribution \u2013 the top 1%\u00a0\u00a0— are really rich or really, really, really rich.\u00a0 Whether they have 10% of total income or 20% will drive the Gini coefficient.\u00a0 Unlike such metrics as unemployment and inflation, Gini is a highly abstract statistic.\u00a0 If Jane Citizen is sweating on the subway to get to her pathetic $100,000 job in Manhattan, what does it matter to her whether this year Mayor Bloomberg earned $50 million or $500 million?<\/p>\n
It may not matter much to Jane, but it matters a lot to three influential, or at least ubiquitous, liberal economists \u2013 Robert Reich, Joseph Stiglitz, and Paul Krugman.\u00a0 Because they are all men of the left, I’ll dub them the Marx Brothers.\u00a0 Here they are expounding on inequality:<\/p>\n
Paul<\/strong>:\u00a0\u00a0 \u201cInequality is a major reason the economy is still so depressed and unemployment so high. . . . the takeover of half our political spectrum by the 0.01 percent is, I\u2019d argue, also responsible for the degradation of our economic discourse.\u201d (May 3, 2012 NYT Column)<\/p>\n Joe <\/strong>bemoans \u201cthe large and growing inequality that has left the American social fabric, and the country\u2019s economic sustainability, fraying at the edges: the rich were getting richer, while the rest were facing hardships that seemed inconsonant with the American dream.\u201d<\/p>\n Rob<\/strong>:\u00a0 \u201cI have never been as concerned as I am now about the future of our democracy, the corrupting effects of big money in our politics, the stridency and demagoguery of the regressive right, and the accumulation of wealth and power at the very top.\u201d<\/p>\n With Mitt Romney in the political spotlight, the Marx Brothers tend to blame Wall Street for inequality. But the Street\u2019s importance is easily\u00a0exaggerated.\u00a0 According to an exhaustive study of IRS records, if we look at the income (including capital gains) of the top 1% of Americans, financial executives only earned 13.2% of Americans\u2019 total income in 2005, up from 7.7% in 1979, when Wall Street was depressed.\u00a0 What about the infamous top 0.1% of income?\u00a0 The numbers are only a little higher \u2013 17.7%, up from 11.2% in 1979.<\/p>\n Another fallacy of the Marx Brothers is that all the rich guys are on the \u201cregressive right.\u201d Haven\u2019t they noticed that President Obama spends more time in Beverly Hills, Marin County, San Jose, Fairfax County, Westport and the Hamptons than he does in the White House?\u00a0 F. Scott Fitzgerald was right.\u00a0 The rich are different from you and me; they don\u2019t need to worry about taxes.<\/p>\n Marx Brothers for Romney?<\/strong><\/p>\n In any event, the Marx Brothers will be pleased to learn that Mitt Romney has a plan to reduce income inequality in America.\u00a0 New York Times<\/strong> reporter and liberal lion David Leonhardt recently demonstrated that while the rest of the country is struggling, Washington D.C. is booming:<\/p>\n With Washington flourishing while America is foundering, it is clear that the surge in Federal spending and regulation that enriches bureaucrats, lawyers, lobbyists, and government contractors is a key driver of \u00a0income inequality in the U.S.\u00a0 Therefore, Mitt Romney\u2019s plan to cut Federal spending, repeal Obamacare, liberate fossil fuel from the EPA, and roll back other regulations will take a giant step toward reducing the relentless increase in income inequality that so perturbs the Marx Brothers.\u00a0 I’m confident that, once they recognize this, the Marx Brothers will become strong supporters of\u00a0Romney’s candidacy.<\/p>\n On the occupations of top earners, see \u201cJobs and Income Growth of Top Earners and the Causes of Changing Income Inequality: Evidence from U.S. Tax Return Data\u201d by John Bakija, Adam Cole, and Bradley T. Heim (April, 2012).<\/p>\n","protected":false},"excerpt":{"rendered":" I have studied inequality way too much.\u00a0 I once ruined three months of my life sitting in the Boston Public Library in the 1970s, scanning microfilm of the 1875 Massachusetts State Census returns in order to measure wealth inequality.\u00a0 I … Continue reading \n