The Left is at war with economic reality. The intellectual poverty of the Left — which is also a moral poverty — is evident in the fact that its leaders are much more intensely interested in incomes at the top than those at the bottom. Examples are not difficult to come by: Senator Elizabeth Warren is visibly agitated by Jamie Dimon’s recent raise, the AFL-CIO maintains a website dedicated to executive compensation, Barack Obama avows that “at a certain point, you’ve made enough money,” et cetera ad nauseam. The entire rhetoric of inequality is simply an excuse to rage about incomes at the top, a generation’s worth of progressive shenanigans having failed to do much about those at the bottom.The left's only reply to this is, "But, but, the Koch Brothers! And George Bush! And racism!"
It is the case that incomes at the top have gone up while those in the middle and at the bottom have stagnated or declined in real terms. It is not the case that incomes at the top have gone up because those in the middle and at the bottom have stagnated or declined, nor is it the case that incomes in the middle and at the bottom have stagnated or declined because incomes at the top have gone up. There is a relationship between the two phenomena, but it is not the relationship that progressives imagine it to be...
The American rich are not getting richer because of the American tax code. Income inequality in the United States is increasing. It is also increasing in Sweden. And Norway. And Finland. And the Netherlands. And Canada. And Germany. Pick your European welfare state and throw in Japan, too, and you’ll find much the same story.
Incomes are up at the top, stagnating or down elsewhere — but there is no “because” between those two facts. link
Tuesday, February 11, 2014
Income Inequality
It's enough to make you wonder if the left's current bugaboo, "income inequality", is as made up as their phony "war on women":
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Well ... I would offer an alternative theory. I've got no problem with the rich making as much as they can -- I don't, however, believe that the government should help them do it. When Reagan tried supply side economics, lowering dramatically the top tax bracket on the rich without stipulating that this rate drop would be dependent on creating jobs, two very predictable things happened: the rich invested in the stock market, causing it to soar; the poor and middle class improved very little. When both Bush and Obama bailed out industry, some of the money made it to the middle class, but a large percentage went to the CEOs as bonuses. And lastly, the most egregious and most ignored helping hand to the rich ... The FICA tax, which is effectively 17%, and goes to pay for our most underfunded expenditures, cuts off at about $100,000 ... probably a bit higher now. That makes it an incredibly regressive tax...if we cut off the limit we could dramatically reduce the income gap AND help balance the budget at the same time.
To significant extent, it's whatever flies.
The left's always floating trial balloons to see what issue will catch the fancy of the left. It might be thirty-round magazines but if that doesn't work then it's the imminent extinction of polar bears and if that falls through then it's income inequality.
Another issue that's making the rounds is a bump in the minimum wage. That, like all left wing issues popped out of nowhere to become hugely important. Not so much due to a change in the economic plight of minimum wage-earners although the advent of Obamacare will make life more difficult for them but because the issue caught fire with the left.
I don't think facts are on your side, Max, when you argue "the poor and middle class improved very little."
Perhaps I should have included "relative to the wealthy" ... in which case, the facts are. The gap has definitely widened.
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