Among the various
obsessions of true believers of the right and left, the idea of “income
inequality” is one of the more incomprehensible, inasmuch as income inequality
is a state of affairs just about all of us, including crusading editorial
writers, spend our adult lives trying to achieve. Its pursuit is why we go to college, send our kids to college,
work hard, improve our skills and get better at our jobs, work ourselves half
to death, and lecture our children on the importance of hard work and good grades
and not settling for being that tattooed guy behind the counter at the local
Git ‘n’ Go. We try to better ourselves.
We try to improve our lives and the lives of the people who depend on
us. We strive, because we want to make our incomes unequal to the
incomes of those who don’t. There is
nothing unusual or immoral or unfair about this, and it’s something that is
universally embraced – left, right, and center – in this country. But, maybe it’s something every generation
has to learn anew, as they grow into adulthood and try to come to grips with
the reality that while people are equal under the law, they are not equal in
terms of intellect, drive, or wealth-creating ability and ambition. Some people are smarter and more industrious
– and more willing to sacrifice in the short term for the sake of the long --
than others. Get used to it.
I assume that when people talk about income inequality,
they understand that its opposite is income equality – a condition in
which all people make the same amount of money. How they think that would work,
and why they think it would be desirable, is anybody’s guess. Note to the
income-inequality-anguished: If that’s not what you mean by the term, then you
should let us know what you do mean. Please be specific.
From what I can gather, specifity here is a statistical
exercise in which the breakdown of wealth concentration in the U.S. is put on
display, and the display itself becomes prima facie evidence of an
unfair and possibly dangerous state of affairs about which something needs to
be done. As in…
·
The
top 1% took in 23.5% of all of the
country's income in 2007. In 1979 they only took in 8.9%.
- Top 1%
owns more than 90% of us combined. In 2007, the latest year for which
figures are available from the Federal Reserve Board, the richest 1% of
U.S. households owned 33.8% of the nation's private wealth. That's more
than the combined wealth of the bottom 90 percent.
·
400
people have as much wealth as half of our population. The combined net worth of the
Forbes 400 wealthiest Americans in 2007: $1.5 trillion. The combined net worth
of the poorest 50% of American households: $1.6 trillion.
They draw these statistics like a gun, as though the wrongness of the conditions they describe is self-evident. But what all of it really means is that while the numbers and percentages go up and down, the basic picture remains as it has been since time immemorial: Some folks have a whole lot of money and most of the rest of us don’t. The obvious question is: So what? That people do not all make the same amount of money; and that there are far fewer rich people than not-rich people is not news, nor is it “wrong” or immoral. Wealth accumulation is not a zero-sum game; money that the extremely rich take in does not come out of the pool available to wage earners and others. Those people (which is most of us) are free to improve upon their circumstances regardless of what wealthy people are or are not up to. People are not poor because other people are rich. It is absolutely true that improving upon one’s circumstances can be quite difficult, but the difficulty does not stem from what other people have or don’t have.
Also, this:
Not everyone who is un-rich is poor. In
fact, very few of us are in that category.
The reality is that every single one of us occupies a slot on a vast
continuum of income levels ranging from the very-hard-up to the
just-making-ends-meet to the doing-okay to the plenty-prosperous to the
really-rich to the have-more-money-than-they-know-what-to-do-with – and the
innumerable slots in between. The idea
of just two classes – a ridiculously wealthy one-percent and everyone else in
the poverty-stricken masses -- is illusory. That there is a tiny and
super-powerful coterie of lavishly wealthy moustache-twirling villains cackling
over the plight of the wretched rest of us is a mythology from which those who
bemoan income inequality appear to draw much of their energy and anger. But that’s not the reality. The reality is that there is still a huge
middle class in this country that does okay and whose members are unconcerned
with how (or how much) money flows to the top 1%.
There is a
rich vein of class resentment mixed with adolescent moral indignation in the
income inequality argument that is hard to ignore. The sense is that anyone
with money, simply by virtue of having that money, doesn’t deserve it; and
anyone who doesn’t have money, simply by virtue of not having money, does
deserve it. The very rich have “more
than they need” and should therefore, in the service of remediating the income
inequality problem, hand some of it over to people who don’t. In
fact, most of the people who think that are themselves impossibly rich compared
to other people in the world and even in the U.S. It’s all relative. Does the editorial writer who makes $150,000
a year even understand that he is most certainly rich compared to a person who
makes $20,000 a year? Doers he
understand that their income inequality is gulf-like? The very idea of a guy who makes, say, $250,000 a year resenting
and castigating members of the top 1% is laughable. It is indisputable that the $250K guy, including the one who
rails against the evils of income inequality, is identified far more closely in
most people’s minds with the top 1-percenters than he is with the $20K guy.
In
this country, there are people without means who need and deserve the help of
the rest of us. We should give it to
them. And we do. But that’s a different discussion from the
gauzy concept of income inequality, which seems to be arguing that a tiny and
incredibly greedy minority is rendering all of us poverty-stricken.
Fighting about it has the effect of siphoning political energy and resources
away from related but real problems, including a tax code that may not share
the tax burden fairly, and shifts in the economic landscape that have caused
less-than-robust wage growth and the contraction of the middle class. Hand-wringing over income inequality is a
self-indulgent and unproductive exercise in moral superiority of the sort that
would be more at home in that little saloon down the street that’s popular with
earnest college sophomores.
