Today's post riffs on the cartoon below and the cartoon below plays on the old
RCA logo, which I can't show here because it is subject to copyright. The subject today is
income inequality, a topic addressed here before and will probably be addressed again. It's important.
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There is no simple fix for income inequality; numerous articles propose how to fix it, but mostly talk about what's wrong. An article in The Economist, "
Growing apart," looks at some of these effects, such as:
A BARRAGE of new statistics on American living standards offers some grounds for optimism. A typical American household’s income has stopped falling for the first time in five years, and the poverty rate has stopped rising. At last, it seems, the expansion is strong enough at least to stabilise ordinary people’s incomes.
But the main message is a grim one. Most of the growth is going to an extraordinarily small share of the population: 95% of the gains from the recovery have gone to the richest 1% of people, whose share of overall income is once again close to its highest level in a century. The most unequal country in the rich world is thus becoming even more so.
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From the
Economist article:
Inequality can be a symptom of inefficiency. The implicit subsidy provided to banks that governments judge too big to fail allows bankers to overpay themselves. And a highly skewed distribution can lower growth, if it translates into less equality of opportunity for the next generation. This seems to be happening. The gap in test scores between rich and poor children is 30-40% wider than it was 25 years ago: given that the distribution of innate intelligence is unlikely to have shifted so much in a generation, that suggests that rich youngsters are benefiting more than ever from their economic and social advantages. Measures of social mobility between generations, already lower than in much of Europe, have stagnated.
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Back to the
article in the Economist --
The attack on favours for the wealthy ought to start with the budget. America’s tax code is riddled with distortions that favour the rich, from the loopholes benefiting private equity to the mortgage-interest deduction (an enormous subsidy for those who buy big houses). A simpler, flatter code with no exemptions would be more efficient and more progressive. A blast of deregulation would help, too. Many of America’s most lucrative occupations are shielded by pointlessly restrictive rules (think doctors and lawyers).
Investment in the young should focus on early education. Pre-school is a crucial first step to improving the lot of disadvantaged children, and America is an international laggard. According to the OECD, it ranks only 28th out of 38 leading economies in the proportion of four-year-olds in education. Mr Obama has a plan to push universal pre-school. The details are imperfect, but it is a goal that Republicans should embrace. Equality of outcome will always be a fantasy, but America should do more to spread opportunity widely. A society without hand-ups won’t have much hope.
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Another way to look at this topic is from the angle of
wealth distribution. Dr. Dale Archer, writing in Forbes, asks the intesting question: "
Could America's Wealth Gap Lead To A Revolt?"
If we consider a "master" one who has control over your economic well-being, who's your master? The financial institutions that hold your money? The government that issues your social security check? The company that pays you? Do they owe you a fair chance?
-- Marge
