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U.S. Public Supports a More Equitable Distribution of Income

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According to a recent study by Michael I. Norton of the Harvard Business School and Dan Ariely of Duke University, Americans overwhelmingly support a more just distribution of income in the United States. In fact, when respondents in the study were asked to pick their ideal income distribution in a blind comparison comparing income distributions in Sweden, the U.S. and a completely equal income distribution, respondents overwhelming chose either Sweden (47%) or an equal income distribution (43%). Only 10% of respondents chose the current income distribution in the U.S. When asked to compare Sweden, where the wealthiest 20% control 36% of the wealth, to the U.S., where the same 20% control 84% of the wealth, respondents (again in a blind comparison) chose Sweden over the U.S. 92% to 8%.

The study also had some other interesting results. First the majority of respondents vastly underestimated the actual level of wealth inequality in the U.S., most believing that the wealthiest 20% control 59% of the wealth (as noted above the actual number is 84%). When asked to construct their own ideal distributions of wealth the majority of respondents assigned 32% of wealth to the top quintile. To construct this more equitable system respondents favored moving wealth from the top quintile to the bottom three, leaving the second untouched, and evidencing a greater concern for the less fortunate than the more fortunate. More startling, these views held across political, gender, and economic lines. Meaning that Americans of all different levels of income, genders, and political persuasions favor a more equitable model along the lines of Sweden and not the current distribution.

What this suggests to me is that the question we should be asking ourselves is not whether or not income redistribution is a good thing, since Americans are overwhelmingly in favor of it, but what is the best way to go about it. Here is where I suspect to find the most disagreement, probably because people who ascribe to different political ideologies understand the causes of such inequality differently. I also think, however, that some of this disagreement could be solved simply by educating people about what the actual wealth distribution is the U.S. is, something that people seem woefully ignorant of.

The most obvious answer to the question of how to change the current imbalance to a fairer one is through taxes, a subject on which I’ve already written from a Catholic Social Teaching standpoint. Other options include things like better wage laws and changes in the federal budget (notably a drastic reduction in defense spending). Whatever the answer is, this is clearly where the conversation should be focused. Something is clearly broken in the U.S., and as this study indicates, people overwhelmingly agree on the problem. Identifying the problem is always an important first step, now we need to get serious about finding the solution. 

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About Stephen DeWitt, OFM

  • http://www.republicofdave.com Dave Nalle

    A reprehensibly misleading approach to this topic. The problem with the survey you cite is that it’s a very deceptive approach to the topic. It’s structured to produce the result the researchers want. If they had asked people if they wanted THEIR wealth redistributed to someone else to achieve equalization the responses would have been overwhelmingly negative, especially if the researchers were truly honest and admitted that the only way to do that would be to lower the income levels of the population across the board.

    Redistributionism is an illusion and the equality which it produces is slavery. The US deserves better.

  • Baronius

    Dave’s right. “Reprehensible” is the best word for this article. It’s easy to imagine what a just system would look like, but when you apply it to the real world you see how much injustice would be required to implement it. That’s not to say that government doesn’t have a role in protecting its people, but inequality isn’t the cause of poverty, and any attempt to cure poverty by reducing inequality is doomed to fail.

    Inequality is a statistical artifact. It doesn’t cause anything, but it can be caused by any number of things. If your car isn’t moving, the problem may be a busted transmission or a lack of gasoline. The problem isn’t that your car isn’t moving. You could fix your car’s lack of movement by towing it to the top of a hill and releasing the emergency brake, but that can’t be called an improvement.

    If there is a problem, it’s poverty. Wealth transfer doesn’t seem to be able to cure poverty. If we want to cure poverty, we need to ask ourselves what would work.

  • http://thingsalongtheway.blogspot.com/ No It’s Not

    Dave and Baronius fail to acknowledge the actual redistribution scheme that exists and yes, it does produce slavery. Therefore, they lack credibility and would like to unfairly apply their distortions to everyone.

    A society gets to decide how to handle wealth. This one decided that the wealthy would enslave the worker. We have every right to change that and allow labor, which has primacy to capital, to become supreme in importance.

  • Baronius

    NIN, there’s a difference between slavery and labor. Slaves don’t choose their jobs, negotiate terms, or leave when they get a better offer. Labor is just; slavery is unjust. By confusing the two, you mock both the dignity of work and the indignity of compulsion.

  • Cannonshop

    We’ve SEEN a Redistributionist model at work before-the Soviet Union, and the outcome of that system. No thanks.

  • Glenn Contrarian

    Dave and Baronius –

    “Wealth redistribution” – such a bugaboo phrase among conservatives…

    …but what not a single conservative I’ve ever heard will admit is that since Reaganomics took effect, the real wages of the top 1%, have skyrocketed, while the real wages of the bottom 79% have stayed stagnant, repeat, stagnant. As a result, the top one percent have an average household income of over $27M, yet the bottom 90% have an average income of slightly over $31,000. Vanity Fair provides an enlightening article – Of the 1%, By the 1%, For the 1% – that shows how we got to this point, and how it has adversely affected American society as a whole.

    Now I know that conservatives don’t like looking at the big picture, at what’s good for the people as a whole…they like instead to concentrate on what’s good for the individual, and anything that they feel hinders the ability of the individual to prosper is wrong and unpatriotic and probably socialist. What they don’t get, though, is that what the individual thinks is good for himself is often NOT good for America as a whole. But big-picture concepts are not popular among conservatives.

    Such is conservative rhetoric – but rhetoric (backed by corporate donations and the political power that always follows) is ALL they have. They flatly ignore the overall results of Reaganomics, the economic theory that has enshrined the ability of the rich to get obscenely richer, while the middle- and lower-classes have seen ZERO improvement in terms of real income, and an increasingly smaller slice of the economic pie ever since Reaganomics took effect.

    “Wealth redistribution” – that’s the pejorative conservative term for taxing the rich, despite the fact that Adam Smith and Thomas Jefferson both recognized its necessity, and such “wealth redistribution” (also known as “shared sacrifice”) was part of what helped America nearly pay off our post-WWII federal debt.

    Such wonderful rhetoric the conservatives have…but the HISTORICAL FACTS belie their error. Not that facts count for anything when political power and Precious Corporate Profits are at stake….

  • troll

    …the jump from a measurement of preferred ideals to policy proposals and claims of support involves a conceptual sleight of hands worthy of the Jesuits

  • Glenn Contrarian

    C-shop –

    Using the Soviet Union as an example is comparing apples and oranges – you cannot use the wildly different tax structures of the Soviet Union and use them to argue about tax structures in America. As this article describes, in the Soviet Union, state-owned enterprises were taxed at a high level – meaning, the state was essentially taxing itself – and the individual was often not even aware of paying taxes since they were paid out at the enterprise level to begin with.

    For smaller businesses, some items were significantly taxed – and if the selling price of an item was less than the expected price, then the state would essentially subsidize that item.

    And property taxes were completely unknown.

    So in other words, C-shop, you can’t use a centrally-planned economy to make judgments about a decentralized capitalist economy – the comparisons simply don’t work.

    That said, is Reaganomics (which we are STILL using) a good thing since 90% of our population has seen at best stagnant growth in real wages since 1980, while the top one percent has seen their wages skyrocket? Has ‘trickle-down’ economics worked for the middle- and lower-class American people?

  • http://afranciscanabroad.com Stephen DeWitt, OFM

    Thanks to all for the comments.

    Dave, to address your comment: the authors of the study I cited break down the responses they got by income level and even among the top quintile there was consistent support for a radically different distribution of income. Presumably people in that income bracket are smart enough to realize that putting their preferences into practice would require them to lose some wealth overall.

    Baronius, I am not sure how a system that reduces the pooling of wealth at the top of our society would lead to slavery necessarily. You are correct, I think, in pointing out that inequality isn’t a cause, but a symptom. As a symptom, however, it is a reliable indicator of the health of a society. What it says about our society is that we are in trouble and badly so. How we address this problem is a separate discussion. My point here was to identify the fact that a surprisingly consistent consensus exists that the current structure of wealth in our society is indicative that something is wrong.

    I have some ideas about how to address the problem, but none of them involves the government simply taking money from the wealthy and giving it directly for the poor. As someone who is generally liberal in my social thinking, I tend to favor better schools, programs to strengthen and support families, and a higher minimum wage; but I think there are probably other good ideas that haven’t occurred to me. A more progressive tax structure could create the money to fund such programs.

    I also want to emphasize Glen Contrarian’s point about the need to pay attention to the health of society as a whole. In the Catholic moral tradition, we call this the common good, and maintaining it is the primary responsibility of government. At minimum this means ensuring that all members of a society have access to what is necessary for a dignified life (food, shelter, clothing, health care, education, among others). A society in which the majority of wealth is concentrated in a relatively small number of people is one where the common good is not being sufficiently protected. In this situation, government not only has the right, but the duty to take corrective action. This is where we are now and this is the problem that needs urgent action.

  • Baronius

    “As a symptom, however, it is a reliable indicator of the health of a society. What it says about our society is that we are in trouble and badly so.”

    I don’t think it is reliable. Inequality tends to go up with economic development and down during long declines. Inequality doesn’t preclude economic growth among the among the poor – in fact, it can indicate massive economic growth among the poor. I just don’t think it measures what you think it measures.

    “How we address this problem is a separate discussion.”

    It may be a separate discussion, but you do hint at your preferred answers in both this article and the one you linked to. You’re clearly thinking in terms of governmentally-mandated income redistribution.

    “My point here was to identify the fact that a surprisingly consistent consensus exists that the current structure of wealth in our society is indicative that something is wrong.”

    No, what you’re identifying is that people believe in greater equality when personal input is removed from the equation. The study also highlights that most people can’t do algebraic and statistical analysis in their heads, which shouldn’t surprise anyone.

  • Glenn Contrarian

    Baronius –

    Inequality tends to go up with economic development and down during long declines. Inequality doesn’t preclude economic growth among the among the poor – in fact, it can indicate massive economic growth among the poor.

    I’d love to see you prove this with some kind of reliable reference…because the references I linked to in comment #6 show just the opposite. Not that the BC conservatives pay attention to the actual data, of course.

  • Clavos

    I find it very strange that a significant portion of the members of the top (or even the second and third) quintile would be so eager to part with their life’s savings.

    I emphatically am not.

  • Clavos

    …the jump from a measurement of preferred ideals to policy proposals and claims of support involves a conceptual sleight of hands worthy of the Jesuits

    Bears repeating.

    Troll, that bridge of yours is a wondrous place in my estimation.

  • Cannonshop

    Simple Question, Glenn, How do you intend to redistribute and apportion that wealth, if not by shifting to a central-planning economy, thus entering into such fine company as North Korea, Cuba, and the former soviet union? The core of the IDEA of Redistributing Wealth is Central Planning, as would be continuing to enforce that ‘equality’ afterward.

  • Cannonshop

    Typically, it has been shown, those who keep everyone equal tend to keep themselves, their families, and their close friends MORE equal, ala Orwell’s Animal Farm.

  • http://www.RoseDigitalMarketing.com Christopher Rose

    Whilst having an instinctive distrust of faithist notions, this writer does raise some interesting points.

    Although to out and out capitalists, the idea of income re-distribution may seem unreasonable, perhaps we should bear in mind the countries undergoing such radical upheaval right now, in which the wealth imbalance is even more extreme than it is in the USA.

    Without some degree of wealth re-distribution, countries tend to become unbalanced and the poorer people increasingly disenfranchised, which leads to resentment and, as we are seeing, eventually revolution.

    Regrettable as wealth re-distribution may be to some on ideological grounds, it is effectively the price to be paid for social cohesion and order.

    That’s not to say that there couldn’t be far better ways to do it than is currently being achieved, but that is a whole other subject for debate.

  • Baronius

    “Inequality tends to go up with economic development and down during long declines.” – See the Kuznets Curve.

    “Inequality doesn’t preclude economic growth among the among the poor” – inequality can increase as long as the rich are growing richer faster than the poor are growing richer.

    in fact, it can indicate massive economic growth among the poor.” – You can reason this out once you consider that Steve Jobs and Bill Gates started out in the bottom quintile.

  • Glenn Contrarian

    C-shop –

    Simple Question, Glenn, How do you intend to redistribute and apportion that wealth, if not by shifting to a central-planning economy, thus entering into such fine company as North Korea, Cuba, and the former soviet union? The core of the IDEA of Redistributing Wealth is Central Planning, as would be continuing to enforce that ‘equality’ afterward.

    There you go again, comparing apples and oranges. There is NO instance of Democrats and liberals wanting to ‘reapportion wealth’.

    All we’re wanting is to have a sensible tax structure that includes a progressive tax as was supported by such noted Soviet sympathizers as Thomas Jefferson and Dwight Eisenhower. Our top marginal tax rate was at 70% until Reagan took over…but as it stands now, the very rich pay significantly less of a percentage of their income in taxes than do you or I, and major corporations often pay no tax at all!

    Is this somehow fair, C-shop? Is wanting to go back to what we had under the several administrations before Reagan somehow instituting a centrally-planned economy? I’d love to hear how you arrived at that particular conclusion!

    Good grief, C-shop, look again at that Kool-Aid that you’re drinking!

  • Boeke

    One thing for certain, peoples perceptions of wealth gap greatly underestimate the actual gap. Perhaps if people properly estimated and appreciated the actual gap between rich and poor they would be in favor of significant re-adjustments toward equalisation.

    So one can maintain that rightists have been successful in disguising the big gap between rich and poor. It’s a big propaganda victory, suggesting that the Mianstream Media is rightist.

  • Glenn Contrarian

    Baronius –

    Okay…so according to your “Kuznets Curve”, then, nearly every first-world democracy should have a huge income inequality gap, right? And most third-world countries should have a smaller income inequality gap, right?

    SO WHY AIN’T IT THAT WAY IN THE REAL WORLD, if your “Kuznets Curve” is right? That one chart by itself – if you’ll actually look at it – blows the “Kuznets Curve” out of the water!

    That’s what drives me nuts about you conservatives – you place SO much faith in your rhetoric…but you completely ignore the real-world facts that obviate the falsity of that rhetoric!

    And you point out the success of Steve Jobs and Bill Gates as proof of America’s ‘upward mobility’…but that’s known as ‘cherry picking’, isn’t it? I wonder what you would say of job growth in America since we started down this “trickle-down economics” path in 1980?

    But instead of looking at just one or two people, how about looking at entire nations instead:

    A new report from the Organization for Economic Co-Operation and Development (OECD) finds that social mobility between generations is dramatically lower in the U.S. than in many other developed countries.

    So if you want your children to climb the socioeconomic ladder higher than you did, move to Canada.

    The report finds the U.S. ranking well below Denmark, Australia, Norway, Finland, Canada, Sweden, Germany and Spain in terms of how freely citizens move up or down the social ladder. Only in Italy and Great Britain is the intensity of the relationship between individual and parental earnings even greater.

    Here’s another great resource that can help you remove some of the misconceptions you gained since you started on the conservatives’ Kool-Aid diet.

    So Baronius – willya PLEASE learn that while rhetoric may sound great, when that rhetoric does NOT work when compared to factual data in the real world, then maybe, just maybe, that rhetoric is WRONG.

  • http://theugliestamerican.blogspot.com Andy Marsh

    Glenn – In comment 18 you say, the top marginal tax rate was 70%. And you say it like it’s no big deal! Read that number man! 70! SEVENTY%. I mean holy shit! That doesn’t bother you?

    I don’t give a rats ass how much money a person makes, the govt has no right to SEVENTY PERCENT OF IT!!!

    Do liberals really believe that it’s cool for the govt to take that much from one person? If they do I’m absolutely positive I’ll never become one!

  • Baronius

    Cannon – Wealth redistribution is different from central planning in principle. Central planning involves the allocation of resources before production, while wealth redistribution assigns the gains from production. As a practical matter, usually there’s wealth distribution first, followed by regulation of industry, followed by control of industry. Once a politician has convinced himself that he’s a benevolent master and economist, it’s a short step to believing he can run a factory.

    Christopher – I’m glad you pointed out that you’re not a faithist. AGAIN. Because as soon as I saw you made a comment to an article about economic policy, I just assumed that you’d converted. You know, because the author is a Franciscan. I mean, that’d practically make you a pope or something. I’m glad you were there to clarify matters by declaring, AGAIN, that you’re not a faithist.

  • http://www.RoseDigitalMarketing.com Christopher Rose

    Baronius, perhaps that bee in your bonnet has finally driven you bonkers because I didn’t say I wasn’t a faithist, I said that I have “an instinctive distrust of faithist notions”, which is a reasonable enough precaution…

    I will add that you’re not a comedian though – does that make you feel better?

  • Glenn Contrarian

    Andy –

    Glenn – In comment 18 you say, the top marginal tax rate was 70%. And you say it like it’s no big deal! Read that number man! 70! SEVENTY%. I mean holy shit! That doesn’t bother you?

    I don’t give a rats ass how much money a person makes, the govt has no right to SEVENTY PERCENT OF IT!!!

    Didja happen to notice how the Rockefellers were all lining up at Goodwill back in the 1970’s? No? Could it be that there’s more to it than what you think?

    Yeah.

    For one thing, the top marginal tax rate (which back during the Truman AND Eisenhower admins were at NINETY-ONE percent – which is how we nearly paid off our entire national debt which was greater in today’s dollars than our current one)…

    …the top marginal tax rate back then was ONLY on the wealthiest of American citizens…and most of them didn’t pay out seventy or ninety percent of their annual income in taxes. Why? Because instead of paying out such outrageous sums, they instead tended to immediately reinvest said income into their businesses, and so were able to pay far less in taxes while simultaneously growing their businesses (and adding many more jobs).

    Now doesn’t that make a bit more sense than the super-rich of today building factories and resorts overseas and closing down factories stateside? And if you want a bit of supporting info, think about how much BETTER our employment rates were in the 1950’s through the 1970’s compared to today, now that Reaganomics has allowed so many of our factories to be sent overseas!

    Think about it, Andy -

  • Glenn Contrarian

    Baronius –

    I notice you didn’t say anything about how good income inequality is, and how the “Kuznets Curve” supports it, after I posted a link showing how false both concepts are.

  • http://www.RoseDigitalMarketing.com Christopher Rose

    That’s because he was busy responding to things people didn’t say!

    ;-)

  • http://theugliestamerican.blogspot.com Andy Marsh

    Glenn – my point is, I really don’t care how good the economy was or anything like that…I still don’t think the govt deserves to institute 70 or 91 percent tax rates on ANYONE. I have no problem with incentives to reinvest in a business, but holy christ!, it amazes me that you and others are okay with this!

    And I joined the navy in the 70’s…because the economy was so good…just sayin’ Can’t speak to the 50’s and 60’s, I was born in ’59. But my pop was doing okay, for an independant (non-union) truck driver.

    What’s the incentive to make it in this country if the govt is gonna take it all away anyway?

  • Baronius

    Glenn – I typically don’t read your comments. I don’t say that to be rude, but I don’t think our conversations have ever gone anywhere.

  • Baronius

    Christopher – You’ve got to admit that your mention of faithism was apropos of nothing, given that this is an article and thread about economic policy.

  • zingzing

    baronius, #28 is pathetic and transparent. you obviously do read his comments. and the points you’ve made on this thread have been unusually thin (bill gates? come on…) and strangely silver spoonish.

  • Baronius

    Zing, honestly, I typically don’t. I prefer to read and reply to any comment that’s directed at me, but a quick look at Glenn’s #6 and #20 warned me off. I did read and reply to #11 because it gave me the opportunity to clarify a couple of points. I hate leaving comments addressed to me unread, but having been away from the boards through a lot of April, I’ve realized how much time I waste in conversations that neither convince me or others nor clarify our positions.

  • zingzing

    that’s very convenient, baronius. meh. do what you will.

  • Glenn Contrarian

    Baronius – how very convenient. If you never examine the evidence the other side brings, you never have to defend your claims – no matter how silly – against the evidence!

    Which makes me wonder – do you work for Fox News? They operate the same way….

    But it is sad that you refuse to look at a simple chart on a good reference that solidly negates your claim.

  • http://www.RoseDigitalMarketing.com Christopher Rose

    Wrong again, Baronius, something you are apparently making a habit of; couldn’t be your dogma is getting in the way of your ability to think clearly, could it?

    More seriously, any writer’s affiliations should always be taken into consideration and this one made a good point in the article despite their conditioning, which is the main feature of their minibiography (miniography?).

    I note you haven’t responded to my point or anything to do with the article itself, just indulged in your customary arguments with commenters. You have actually read the article, right?

    Andy, once again I completely agree with you; such high tax rates are unacceptable and totally discouraging – except for those who see it as an incentive to learn all about offshore tax havens and legitimate tax avoidance strategies, which is what I am doing…

  • Boeke

    Andy #27: you’ll probably have to decide whether you want to discuss economic theory or moral principle, rather than just switch from one to the other when it’s not going your way.

  • Dan

    “…it is sad that you refuse to look at a simple chart on a good reference that solidly negates your claim”—Glenn Contrarian

    Well, I’ve had a look. It’s the same dishonesty the left always engages in. They completely ignore income mobility.

    The truth: People who’s incomes were in the bottom 20% in 1996 saw an average increase of 91% by 2005. On the other side, People at the top 100th of 1% saw their incomes decrease by 26% over those very same years.

    US Treasury Department

  • Glenn Contrarian

    Gee, Dan, that’s very strange –

    Because in the very same reference I found this quote:

    Many studies have documented the long-term trend of increasing income inequality in the U.S. economy. U.S. Census data, for example, show that the share of household income of the top 20 percent of households increased from 44.1 percent in 1980 to 50.4 percent by 2005, with the share of the bottom 20 percent decreasing from 4.2 percent to 3.4 percent. Similarly, Piketty and Saez (1998, 2007) find that the share of income of the top 10 percent of taxpayers increased from 31.7 percent in 1960 to 44.3 percent in 2005, while the share of the top 1 percent increased from 8.4 percent to 17.4 percent.

    So how do we reconcile what you posted and what I posted from the same article? Read further in the same article:

    Economic historian Joseph Schumpeter compared the income distribution to a hotel where some rooms are luxurious, but others are small and shabby. The rooms are always occupied, but often by different people.3 Important aspects of fairness are that those in the small rooms to have an opportunity to move to a better one, and that the luxurious rooms are not always occupied by the same people. Mobility means that over time people move between rooms. The frequency with which people move between rooms is a crucial aspect of the changing trends in income inequality in the United States.

    In other words, many people moved up or down and the same people did not occupy the same income ranges…but the income inequality INCREASED. Income inequality, Dan, is NOT the same thing as ‘social mobility’.

  • Dan

    “Income inequality, Dan, is NOT the same thing as ‘social mobility’.”—Glenn

    It’s not “social mobility”, it’s “income mobility”. The reason those in the bottom 20% had their incomes go up 91% while the top 100th of 1% went down 26% is because the “income inequality” myth is about ranges of income, not what actually happens to the people in those ranges.

    Not only that but “Median incomes of all taxpayers in the sample increased by 24 percent after adjusting for inflation.” So most people should be happy.

    Also Glenn, when the dependent welfare class is increased, it drags down the bottom quintile average income. Thus, increasing the “inequality” spread that you and mother jones peddle as economic injustice.

    In reality “Only about 25 percent of individuals in the top 0.01 percent in 1996 remained in the top 0.01 percent in 2005.”

    And “About half (58 percent by one measure and 45 percent by another measure) of those in the bottom income quintile in 1996 moved to a higher income group by 2005.”

    The US Treasury analysis should be the end of your argument, unless you want to pretend to not understand it.

  • Glenn Contrarian

    And you’re still refusing to acknowledge the income inequality gap as it stands.

    As the chart I provided readily shows, the nations with the greatest income inequality gaps are ALL third-world nations. The nations with the least income inequality gaps are almost all first-world democracies.

    Now kindly explain why that is.

  • http://www.republicofdave.com Dave Nalle

    A society gets to decide how to handle wealth. This one decided that the wealthy would enslave the worker.

    This kind of silly hyperbole is what makes it impossible to take this argument seriously. Workers in the US are hardly enslaved. It’s not slavery to be paid a fair market wage for a full day’s work. 100 years ago the opportunity to work where you wanted and earn a fair wage was considered one of the greatest blessings of liberty.

    Dave

  • http://www.republicofdave.com Dave Nalle

    Dan, thanks for the info on income mobility. That’s the first updated info I’ve seen since the famous congressional study of 1998 which was getting dated.

    Dave

  • zingzing

    “100 years ago the opportunity to work where you wanted and earn a fair wage was considered one of the greatest blessings of liberty.”

    good thing that “liberty” means anything you damn well want it to now. i make my liberty face.

    yes, earning a “fair” wage is good. but do you think $5.15 an hour is a fair wage for anything, when you might use that much in gas get home? what’s “fair” to the market is not fair in life at this point. and then there are those that go out to lunch and make more than you make in a week. (and then they got bailed out.)

    something is fundamentally fucked. “fair” isn’t “fair” anymore. this WILL change, although it might not be the way you want it to. no one’s going to sit on their ass getting taken forever. society will fuck some shit up if it has to.

  • Glenn Contrarian

    Dave –

    For anyone who thinks that income equality isn’t a big deal, this chart is an eye-opener. The worst 30 are all third-world countries, and the best are – you got it – mostly first-world countries.

    And you seem to think that America’s workers don’t have it bad at all – but what do you call it when America’s workers put in more hours than any other people on earth – and do so for far less vacation time per year, and (when it comes to first-world democracies) with the worst level of health care coverage?

    No, American workers aren’t enslaved – but they are frogs in a pot that’s slowly being brought to boil. They think they’ve got it good…but only because they don’t know how much better people in a lot of other countries have it.

  • http://thingsalongtheway.blogspot.com/ Cindy

    Dave,

    Hyperbole? I am simply incorporating your own description*. You suggested that the wealthy were to be enslaved by income redistribution. So, how do those who ‘farm’ others, like animals, creating all the rules which those others will live by and obey, achieve the status of ‘slave’, in your eyes, by having to return a better portion of what they skim from them?

    Fair markets wage = the lowest wage that those who own everything can get away with, whether anyone can live on it or not.

    I fail to see where ‘fair’ enters into it. You repeat the words ‘fair wage’ as if the idea needs no defending.

    *Of course the worker actually is a slave. You’ve merely been trained to be blind to that, as your liberal counterpart, Glenn has. It IS slavery to be forced to live under another’s system–and the workplace is a totalitarian culture, with no choice.

    You both act as if this is as natural a situation as if it was ‘made by god’. What kind of free society has most of its members beholden to to a few who accumulate most of the wealth? Living under their dictatorship an average of 5 days a week, which the workplace indisputably is.

    You have no imagination, Dave. You are obligated to defend the tired and cliche ideology you have bought into and you can’t even imagine any other possibility. How unlibertarian the society you envision looks to me.

    There are other possibilities. So, why not discuss those. Why limit ourselves to merely working with what is broken?

  • Baronius

    Cindy’s right that Dave’s invocation of slavery was as overwrought as her own. Still, she seems to believe that her use of the term was appropriate. It’d be great if Dave would state that his use of the term was hyperbole.

  • http://handyfilm.blogspot.com handyguy

    There has been income redistribution in the US during the last 30 years or so — moving from the middle class to the wealthy, primarily.

    The income of the top brackets has skyrocketed in recent decades — while the tax rates have generally declined.

    Has this helped the poor and the middle class by ‘lifting all boats’? Um, no. Their position has stagnated or gotten worse.

    From an excellent article in the current New York magazine about why Paul Krugman has become so politicized in recent years [after beginning as a moderate, even working in the Reagan administration]:

    “Larry Bartels…made the critical connection, in research Krugman devoured and still cites. Perhaps the most important influence on income inequality, Bartels argued, was something economists had not ­emphasized: whether a Democrat or a Republican was in the White House. Since World War II, Bartels found, wealthy families in the 95th percentile in income had seen identical income growth under both parties. But for families in the 20th percentile, the difference was astonishing: Under Democratic presidents, their income grew at six times the rate it did under Republican ones.”

  • Boeke

    It’s safe to say that nothing, including taxes, will deter ambitious people from seeking wealth and power.

  • http://handyfilm.blogspot.com handyguy

    True, Boeke. And I haven’t seen any of our conservative friends claiming that the stagnation of the middle class is a good thing, a desirable thing. They just have a reflex response to the word ‘tax,’ and a very elastic definition of what ‘confiscatory rates’ are. Apparently they are the same as current rates, whatever those may be.

    There should be a special circle of hell just for Grover Norquist. He has a lot to answer for.

  • Clavos

    It’s safe to say that nothing, including taxes, will deter ambitious people from seeking wealth and power.

    Nor should there be…

  • zingzing

    “Nor should there be…”

    …I tell you the truth, it is hard for a rich man to enter the kingdom of heaven. Again I tell you, it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God.

    i’m sure jerry falwell, conservative christians, etc, have been able to reconcile the literal word of god with their plight, but i’m not sure how they do it. anyone?

  • troll

    “income mobility” is a can of worms

    here’s a Fed working paper that massages the data and concludes:

    …evidence suggests that over the 1967?to?2004 time span, a low?income family’s
    probability of moving up decreased, families’ later year incomes increasingly depended on their starting place, and the distribution of families’ lifetime incomes became less equal.

  • Baronius

    Zing, I don’t think a person could reconcile Christianity and Clavos’s ideology. But just as there are religious and non-religious people on the Left, so there are both on the Right. They have different principles but agree on policy matters.

  • Boeke

    So, why not tax the bejeesus out of the rich?

  • Clavos

    So, why not tax the bejeesus out of the rich?

    Would serve ‘em right.

    The nerve of them, getting rich in this country! Violating every principle it stands for!

  • Cannonshop

    #53 What happens when the Rich decline to play anymore, Boeke? Wealth, esp. great wealth, indicates a certain mobility, it’s not too difficult to see “The Rich” taking their ball and going to, say, the Caymans, or some other country, where they are not getting their eyeballs taxed out of them.

    Perhaps, in the process of doing so, taking the business that MADE them rich (and the attendant jobs) along with them, or perhaps just liquidating it and selling off the bits.

    all of which has happened before, though in most earlier examples, it was rich fellas leaving somewhere else to come to the United States with their money.

  • http://www.thingsalongtheway.blogspot.com cindy

    Cannonshop spells out the hostage relationship between labor and capital.

    Why not ask what if the rich expect to turn the US into a ghetto by demanding labor bring itself in line with the third world slave labor market?

    Your comment, Cannonshop, describes the problem with the relationship and reveals how their is no “fair market” for labor. Everything recommended by pro-capitalists makes the claim of fairness, yet really, always ends in trying to appease wealthy because of their unfair advantage.

  • troll

    What happens when the Rich decline to play anymore…

    then labor will reorganize production and go right on producing wealth – which is what productive people do

    …don’t let the door catch you on the ass Mr Galt

  • http://thingsalongtheway.blogspot.com/ Cindy

    One of the main problems with capitalism is capitalists.

    In exploring a run for president Donald Trump as repeatedly accused China of taking manufacturing jobs from the U.S., saying “the problem with our country is that we don’t make anything anymore.”

    But an array of Trump-branded products from ties, dress shirts and other clothing in the Donald J. Trump Signature Collection, to hats, stuffed animals, cufflinks and tie clips are stamped “Made in China.”

    Visitors to the Trump Store in the lobby of the Trump Tower on Fifth Avenue in New York City, or to the displays of Trump clothing at Macy’s in New York?s Herald Square, would be hard-pressed to find much labeled “Made in the U.S.A.”

  • troll

    …like Adam Smith says – never put profiteers in positions of political power

  • http://thingsalongtheway.blogspot.com/ Cindy

    lost an ‘h’

    should be [h]as repeatedly

  • Boeke

    In fact, the rich and powerful HAVE withdrawn from this fallow economy, that’s why there is $2trillion in retained earnings in US corps (that’s money lying dormant, NOT being used to revive the economy, start new industries like wind and solar power, more efficient housing, etc.), and why $2trillion more is lying unemployed in US banks.

    The rich and powerful of America are simply hoarding cash, they are NOT re-investing in America.

    Thus, it makes sense to tax that money right now to kickstart the US economy.

    We can issue ‘vouchers’ for those bonds (they are mainly in treasury bonds, which the Rich get a very special deal on, since they earn 0.25% even on bonds that they are entitled to but have not yet purchased, plus other perqs). We can proclaim the value of those ‘vouchers’ to be whatever we want, as per the history of other voucher systems throughout history.

    It is no more illicit to issue vouchers for corporate savings or inter-bank savings than it is to recommend vouchers for old-age pensioners, as people do when they talk about vouchers for Social Security (thus undermining one of the few remaining sound financial institutions in the USA). In fact, vouchers for SS are adverse since it immobilizes liquid funds that typically flow immediately and constantly into the economy with a very high Economic Multiplier.

    Issue vouchers for Retained Earnings! It’s easy to uncover them since they are located in the Treasury already.

  • Clavos

    Thus, it makes sense to tax that money right now to kickstart the US economy.

    If it’s in their possession, it’s already been taxed.

    Given the temper of the times, the wealthy individual who isn’t actively offshoring his/her wealth and possibly his/her person, is asking for trouble.

  • Boeke

    So what? Tax it again. Money gets taxed over and over as it moves thru the economy. Think how many times that bowl of cereal you had for breakfast was taxed. Money transactions provide convenient and measurable places to extract a tax. Nothing new about that.

    Trouble comes from offshoring wealth, too, as my bro-in-law willl testify, having been indicted.

  • Clavos

    There are ways to offshore wealth without incurring the risk of indictment — renouncing US citizenship and becoming a citizen of another country is one.

  • Clavos

    Money gets taxed over and over as it moves thru the economy.

    True, but apples and oranges. Money in someone’s account isn’t “moving through the economy.”

  • http://www.RoseDigitalMarketing.com Christopher Rose

    It isn’t even necessary to renounce one’s USA citizenship to legally offshore wealth.

    If you guys will forgive the blatant self promotion, I am developing a new service to help people protect their family, homes, businesses and other wealth from the overly aggressive US state and legal system and will be offering said service to clients in due course.

    My understanding is that as a non-American I am better placed to offer such services to people in the USA because if Americans discuss such matters with their domestic accountants and lawyers, they are often required to report you to the government.

    In the meantime, if anybody has any questions, I am happy to help.

  • Boeke

    Trouble is most people don’t discover the need to shelter wealth until after they’ve accumulated it, and it’s difficult to do retroactively.

    It may be that in the future a parent will consider it important to incorporate a newborn and establish his offshore shelters immediately upon birth, much as he might setup a college savings account.

    Why not? We seem to be busy extending people privileges to corporations, why not extend corp privileges to all citizens, especially the ability to escape responsibilities?