Since I agree with the headline assertion—we should address the “wealth gap” from the bottom up, I wish I agreed with the editors of the Washington Post’s strategy for accomplishing that. Their strategy includes feel-good measures like
- A $15,000 credit for first-time home buyers
- Replace IRAs and 401Ks with a 26% credit up to a certain limit
- Income-indexed educational loan repayment plans
I think they’re operating under false premises. I strongly suspect that even were all three of those to be implemented in ten years time income and wealth inequality would be worse than when they started. I would add that the editors should check their numbers; the premium to bachelors degrees ain’t what it used to be.
I’m tempted to actually show the math on this. We cannot admit the number of poor people, particularly poor people with limited English, that we have to the U. S. over the last 50 years and not expect income and wealth inequality to skyrocket. It’s a mathematical certainty. We can do one of the following:
- Limit immigration the way Canada, Australia, and New Zealand do
- Continue to admit large numbers of poor people and accept the consequent income and wealth inequality
- Continue to admit large numbers of poor people and continue to whinge about income and wealth inequality
I would prefer the first; I think we will do the last.
So many people say the words income or wealth inequality and just stop, assuming they’ve made the case for some program or income redistribution. You point out one of the most obvious flaws in this thinking. Allow low skilled jobs to migrate outward, or import low skilled immigrants – two policies in vogue for years now – and you will get structural inequality. Policies in direct conflict.
We also have fallen into two traps predicted in Future Shock (if not before). One, coddling those who don’t want to adapt, specifically going where the jobs are. Go West Young Man has been replaced by, stay put and the government will cut you a check, you poor dear. Second, a bachelor’s degree may not be what it used to be, but the real life skill – the ability to cope with an increasingly rapid and complex pace of life, information flow and societal change – is simply not expected or valued. Better to make people wards of the state. Boneheaded policy, and a recipe for wealth inequality if I’ve ever seen one.
As is often the case, politicians want the issue and the attendant votes, but don’t give a damn about the people affected, or resolving it.
Go West Young Man has been replaced by, stay put and the government will cut you a check, you poor dear.
Americans are older today than they were 160 years ago, I know I am.
There’s no more gold or free land out west.
It’s just not the same.
Speaking of wealth inequality drivers………
I used to subscribe to this guys newsletter. Articles like this are why.
https://www.mauldineconomics.com/frontlinethoughts/federal-reserve-folly
Grey – There is always a rationale for telling someone they are a victim of circumstances, generally invoked by a politician offering some redress…………with someone else’s money. Its akin to today’s everyone gets a trophy mentality. It never really works out well.
File it under I beg your pardon, I never promised you a rose garden………