Dealing with inequality

Increasing inequality is a challenge from several angles. The most obvious is that it enrages people and sometimes makes them do dumb things, like support demagogues. But as destructive is the wasted talent. If the poor lack good skills and habits, they do not make the contribution to the society that they could. The causes of inequality are complex. It is one thing to decry inequality but quite another to make a reasoned response. Our liberal friends like the tax and redistribution tact. But a recent Brookings Study shows that redistribution through taxes is greater today than it was in 1979, when tax rates were much higher and inequality less.

Globalization is one cause of inequality. The evidence for this is the fact that inequality is growing in countries around the world despite very different tax regimes and governing structures. It seems a paradox that inequality within countries is growing while inequality among countries is decreasing, but it makes sense when you think globally. As people have more exposure to the global economy, some do better than others, creating that sort of in-country inequality. But they are also competing globally. The Chinese worker who used to make $1 a day and now makes $100 is much richer than he was and much richer than his countryman whose wages have maybe gone up to $5. Inequality is higher. But as China is richer relative to the U.S. and others, international inequality is down.

There are also big drivers within the U.S., most unrelated to taxes. A big driver of inequality is family breakup. Kids from single parent households do poorer on average. Poorer families tend much less often to be two-parent households and so poverty is exacerbated. Two earners households are a similar driver. People marry those like them. Two well-educated people usually earn much more than two poorly-educated ones.

Lots of this is about choices. The poor make poor choices more often. It is one of the causes and the effects of being poor. As there are more choices to be made, they fall further behind.

So what do we do? Freedom and equal opportunity tend to create inequality. We like those things, even if we dislike what they do.

Posted by Christine & John at November 19, 2014 10:07 PM
Comments
Comment #385763

We have become a dependent state.
On one end, the dependent people have no incentive or desire to do the hard work required to better themselves or their life. Rather than working for a share of the resources, they want them distributed “evenly” by government.
On the other end, the dependent people have no desire to do the hard work required to help those in need, they depend on government to do it for them, so that they can keep more for themselves.

Inequality is no longer about everybody being treated the same under the law, it’s now about special treatment for special interests groups.

Posted by: kctim at November 20, 2014 9:34 AM
Comment #385765

Equal opportunity is a responsibility of the government to provide, however it cannot provide equal opportunity by dividing the citizenry into groups and treating them differently. All men are created equal, but the government is not responsible for them staying that way.

Government is failing to provide equal opportunity by using a perverted interpretation of the commerce clause.

The Federal Reserve’s fiat currency has stripped the value of our currency away using inflation, a tax that affects the poorest of people without affecting the banks themselves.

All states must conform to the federal government’s interpretation of commerce and thus limits the individual states to be the laboratories of progress.

So what do we do? We start by ignoring the facade that is placed over Washington D.C. every election. Did you notice the house and senate have the same people in their leadership positions? The only difference is the poles flipped. Sure, Republicans took seats, but the people calling the shots are still the same.

We have to quit telling ourselves the government is our only recourse to solving problems. Repealing the 16th and the 17th amendments would do that.

Posted by: Weary Willie at November 20, 2014 10:23 AM
Comment #385784

I really don’t have the time to get into a long winded argument, once again with you boneheads ;), on this issue but you guys simply cannot get by the bad ideology you grasp onto to justify these “reasons”. SO lets get some facts together, first of all….

C&J yes globalization is part of the problem as is technology and poverty. But you also dismiss the other problems that have caused both wealth inequality and income inequality to become close to the pre progressive era in our history. This preemptive strike by you on this issue is misguided IMHO as you like to blame the victims. You should know better.

Kctim, you of course blame the government and the victims but seem to forget it is your economic ideology that was responsible for the last go around of both wealth and income inequality in this country. The government is to blame only because our elected representatives repealed some laws and weakened others at the direction of their wealthy backers.

Weary, If the answer truly was to repeal the 16th and 17th amendments then pray tell us why both wealth and income inequality were so large before they existed? You really need to forget Glenn Beck’s revised history.

All y’all need to realize that the billionaire high rollers you continue to make excuses for are also a large part of the problem. MY god guys rule one, follow the money! The deregulation of our financial institutions and regressive taxes on the working poor and middle class, the repeal of estate taxes, the lack of labor unions, the list goes on, are all reasons why the gaps have grown so large today.

Gotta go.

Here is an interesting talk on the subject, it’s long (21 minutes) but worth it.

http://www.ted.com/talks/thomas_piketty_new_thoughts_on_capital_in_the_twenty_first_century?language=en#t-52060

Some more suggestions….
http://fortune.com/2014/10/15/bill-gates-income-inequality/
http://www.mtnmath.com/banana/solutions.html
http://www.pewresearch.org/fact-tank/2014/01/07/5-facts-about-economic-inequality/
http://www.usnews.com/opinion/blogs/economic-intelligence/2012/07/16/breaking-down-the-causes-of-income-inequality

Posted by: j2t2 at November 20, 2014 4:27 PM
Comment #385785

You are exactly correct WW; the same leadership and the same thought process. Until the Republican Party (the current leadership) learns that the left will never like or work with them, that the liberal MSM will never praise them, and that the elitist of DC who organize the cocktail parties will never invite them; they will never accomplish anything for the American people. The tea party is not a party, it is not a DC organized organization, it is a grass roots movement, made up of everyday Americans. It is the enemy of the left, and sad to say, also considered the enemy by the establishment.

Posted by: Sam Jones at November 20, 2014 4:34 PM
Comment #385790

I’m not even sure why they elected officers to the senate and house now? Why didn’t they wait until the new congress was in session? How long are these officers going to be in charge? Until January, or until the next election?

Why did they elect leaders to a lame duck senate and house that will only be in session for 2 months?

Posted by: Weary Willie at November 20, 2014 5:23 PM
Comment #385809

It’s a mathematical absurdity to have rich people and corporations make more money, and therefore pay more taxes, while unemployment is kept high and wages low, and not expect the revenues to become more redistributive. That’s a trickle down economy. If Obama’s plans were allowed to be carried out, we’d see less of this.

Democrats want to resolve the problem, to make the average citizen more self-sufficient. Of course that means people have to start doing more than trickling down in the business world.

If you want to blame Obama for income inequality, answer me this question: were you folks ever planning on doing anything about it, other than letting it go on as it would if nobody did a thing about it? That’s the thing. Republicans are holding him to Democratic party standards of what they want, not their own. Their own would cheer what they’ve artificially forced Obama into doing.

I think we should take your criticism with grain of salt, because it fails to register just how much your own policies and your own efforts contribute to what you’re complaining about, and undermine Obama’s ability to resolve the issue.

Posted by: Stephen Daugherty at November 20, 2014 11:18 PM
Comment #385810

Stephen

Inequality has grown under Obama, but if you read what I wrote, I am not blaming him. In fact, you are the first person to mention his name. Feeling guilty, are we?

Anyway, inequality is caused by various forces, mostly global and societal. The political fix is not really useful in the short run. Lower tax rates did not cause inequality and higher ones will not restore it. Habits and behaviors are the key variables, as well as globalization.

Posted by: C&J at November 20, 2014 11:32 PM
Comment #385811

As for choices?

As your scarcity increases, your choices go from being ones with comfortable margins of safety, to being marginal and prone to destabilizing crises, and finally to being forced to make drastic choices between different priorities in a kind of survival mode.

The Republican idea seems to be that if you push people into this situation hard enough, it will make them repent of their bad habits. My experience of my own troubles has been that you actually get into bad habits in the process of just trying to keep afloat. You get creative. You take opportunities to settle bills or get badly needed items when you can get them, even if it means you’re quickly back in the red again.

Point is, poverty teaches more than the pious kinds of lessons that ideologues on the right believe it does, and they need to realize that it might be better for society if we don’t have so many people having to tighten their belts in that way.

Posted by: Stephen Daugherty at November 20, 2014 11:42 PM
Comment #385814

Stephen

I don’t know if people will repent of their bad habits or not. I am not even sure it is bad habits that create the wealth disparities. A person might wisely choose to have more leisure and/or a better life. I made a conscious decision to earn less money way back in the 1990s. In return, I had a better quality of life, IMO. It would be unfair of me now to demand those who made different choices to give me part of their money, since I would be unable to give them part of my happier experiences.

But it is clearly the case that habits and behaviors are driving inequality and habits and behaviors result from choices.

And I am also just trying to explain inequality. We have become a much more diverse society. We celebrate diversity. Diversity means unequal. We cannot be surprised when we have lots of people doing lots of different things and then find that different outcomes result.

The government’s role in redistributing wealth has GROWN since 1979. Your convenient idea that we can blame Reagan and Bush for inequality is not supported by that fact. Tax cuts were not the cause of inequality, so tax changes will not alleviate it. And inequality has grown under Obama, despite, if not because of his policies.

Really the thing the government might do to make society less unequal are things most do not want. They could institute a draft, for example. Universal military service is an equalizer. Or they could ruin the economy. Hared times and stagflation tend to ruin fortunes and be an equalizer. Do you advocate those things?

Posted by: C&J at November 21, 2014 7:14 AM
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