Equal wrongs
No, wealth inequality isn’t a ‘crisis’ — and voters know it
Inequality is the defining challenge of our time, President Obama says. “There’s too much inequality,” Hillary Clinton said in the debate Tuesday night. And the United States, Bernie Sanders noted at the same event, has more wealth and income inequality than any other country.
Inequality certainly is a symptom of a persistent underlying condition: It may be the leading cause of bullst in America today. To put it simply, there is no inequality crisis.
Sanders, the Grandpa Simpson of economics, has been repeating the nonsense about the US leading the way in inequality for months even though FactCheck.org reported his claims were bogus back in May. The US is only 42nd (out of 117 countries measured) in income inequality, according to the World Bank. We’re only 16th when it comes to the wealth held by the top 1%.
Inequality is to some extent a residual effect of success: If there weren’t any billionaires or millionaires, inequality would be vastly diminished. America attracts and breeds success so brilliantly that we nearly beat the rest of the world combined in some respects: 42% of the world’s millionaires are Americans, and 49% of those with $50 million or more in assets.
The American tendency to respect, and expect, success runs counter to the progressive plan to tax it away. Not only does constant chatter about inequality tend to make Americans more supportive of free enterprise, but it also leads to a blanket suspicion about what the regulatory and taxation elves really mean to do. Discussing the topic decreases “by nearly 20% the share of respondents who ‘trust government’ most of the time,” a study found.
In April, liberal New York Times writer Thomas Edsall noted somberly that there is “a steady decline in support for redistributive government policies.” A Washington Post piece last year delicately noted that Obama was laying off the inequality rhetoric because of “Democratic polling that found that talking about income inequality does not register strongly with the American public and risks accusations of class warfare.”
Even Americans of belowaverage income react negatively to inequality rhetoric.
Princeton philosopher Harry G. Frankfurt hit the New York Times bestseller list in 2005 with his book, “On Bullst.” His followup, “On Inequality,” might as well be called “On Inequality Bulls t.”
“Economic inequality is not in itself morally objectionable,” Frankfurt notes. “From the point of view of morality, it is not important that everyone should have the same. What is morally important is that everyone should have enough.”
Acap on incomes above, say, $100,000 would massively increase both equality and poverty as millions of middleclass people whose jobs depend on the rich in one way or another found themselves unemployed.
Maybe no one is proposing that (“Yet!” say the Sandersnistas), but the kinds of changes that economics writers talk about with the degree of fanboy zeal normally reserved for a sequel to “Guardians of the Galaxy” wouldn’t work either.
“New Research Shows Raising the Top Income Tax Rate Won’t Reduce Inequality,” ran the headline of an October piece — published by the liberal Brookings Institution. For the oped Robin Hoods, that’s kind of like your own Little League coach telling you you’ll never make it to the pros. Peter Orszag, President Obama’s former Office of Management and Budget chief, was one of the study’s authors. Oof.
Railing about inequality is also antiintellec tual, a shortcut for lazy thinkers. “Calculating the size of an equal share of something is generally much easier — a more straightforward and welldefined task — than determining how much a person needs to have enough,” notes Frankfurt. Actual poverty in America has been vastly diminished in recent decades, which kills a major talking point of the left, but inequality is an evergreen subject. It’ll always be with us and may even increase.
People tend to suspect, rightly, that government intervention in the name of fighting inequality will lead to exactly what’s happened in the Obama era: more inequality, with bureaucrats and their cronies standing to gain. The first, second and fourthrichest counties in the US, and six of the top 10, are suburbs of Washington, DC. Americans have noticed. As Steven M. Teles writes in National Affairs, “inequality is often also driven by government itself — and especially by the use of public power to further enrich and empower the already rich and powerful.”
Still, in an interview on French TV, Will Smith said he strongly supported income redistribution.
“I have no issue with paying taxes and whatever needs to be done for my country to grow,” he said. “I’m a black man who didn’t go to college, yet I get to travel around the world and sell my movies, and I believe very firmly that America is the only place on earth that I could exist. So I will pay anything that I need to pay to keep my country growing.”
Then he was told that France’s top tax rate was, at the time, 75%. His response: “Seventyfive! That’s different. Well, God bless America.”