In the next installment of the Bloomberg series on inequality, Megan McArdle and Noah Smith discuss their priorities with respect to inequality.
To be honest I found their conversation unsatisfying for any number of reasons. They despair of solutions. Megan in particular does not seem to appreciate the risks that may accompany increasing income and wealth inequality and is too dismissive of the potential risks.
Over the period of the last 70 years we have torn down many barriers to social equality and erected new ones. On the one hand the barriers to equality among the races and between the sexes were substantial. But on the other the barriers that have been erected since then are nearly as substantial and may just be proxies for barriers based on race or gender.
Here are some questions I would ask:
- How do you mitigate the risk of income or wealth inequality being transmuted into political and social inequality?
- Does increased credentialing actually produce benefits for companies and other institutions?
- Is credentialing just racial or gender-based discrimination by another means?
- How can you maintain social and/or political equality while tearing down the institutions that foster them?
I’ll have to read the linked piece later for a more considered response, but I’ve never been a particular fan of the focus on income inequality. I’ve found the analyticals wanting in a way that I don’t find when we look at discrete concrete issues like, how many children are malnourished, how many students can read or write at an appropriate level, or how many student loans are impossible to pay-back at median income levels?
I can care about discrete issues far more then conceptual ones. The Pew series on the shrinking middle class requires the formation of a construct for middle, lower and upper, which itself seems to reinforce the notion that there should be a lower-class.
I’m not saying that there is not significant inequality. When the gentry take over DC, forcing the service workers to the inner suburbs that lack the tax-base for the additional educational, policing, and transportation needs of the lower class, something has gotten a lot worse for some people. But most of the analysis is at the metro. level, so this won’t be picked-up.
“Megan in particular does not seem to appreciate the risks that may accompany increasing income and wealth inequality and is too dismissive of the potential risks.”
In my experience, naivete is one of characteristics of the libertarian.
I read that earlier today and was unsatisfied as well. The focus on New York and what Noah Smith called the inequality of social status speaks for itself. Both of them see there’s a problem but they barely understand it and therefore cannot point to a solution other than vague hand waving about general policy goals.
I depart from Megan on believing wealth inequality is not an issue, not because, as she suggests, I think redistributing wealth is some panacea, but because the dead should have no claim on the future. I’d rather a world of more John D. Rockefellers than a world full of their self important offspring.
The wealthy now control the media, the government and business. They are well on their way to putting one of their own into the presidency. Almost impossible to change now. In the past the public had at least some skepticism about letting the wealthy control everything. Wealthy people had to at least act through intermediaries. There was some chance they would get caught or outed. Not anymore. The long term propaganda campaign of the wealthy has been very successful.
Steve
To your questions, what happens when credentialing becomes meaningless as we see with some college degrees? Though, there is something wrong with a system that requires a street sweeper or meter reader to have an associate degree. As to the rest, the system will eventually collapse and the cycle begin a new. Until then, lets look at official actions that promote it, e.g. education requirements for government jobs that have no sense, fewer amenities (art museums, artisanal farmers markets, etc), more sewers, better water supplies, better policing, one stop shopping for business licensees/permits, maybe a new CCC, etc.
Looking back say, the Cross of Gold speech by Bryan or Every Man a King by Long, (hmmph, Robin Hood?), income/wealth inequality has been a talking point, spur to action, etc for years and will continue to do so.
There are three areas where self-regulating markets cannot be: labor (unless you can import slaves and teach them everything they need to be productive employees), land (cause you ain’t making any) and money (which you can’t stabilize.)
Can anyone guess which of these government has ceased bothering with? Can you guess in which incomes have stagnated? Can we conclude which gets the least attention from McArdle and Smith as the place to find solutions? Which one shows every sign of being kryptonite to public figures?
No, not that! MOAR monetarism!
Pick your affect: $3K, $4K, $6K. This ought to be good for income inequality.
http://hotair.com/archives/2016/05/12/study-trump-style-tariffs-on-all-imports-would-cost-the-average-u-s-household-6000-per-year/
And, PE Investors, being the smartest people in the whole wide world, suddenly seeing the possibility to make money by producing products at a competitive price will hold their breath and stomp their feet because everybody but free-traders are poopy-heads.
These are the same economists that are under the delusion that sound money and unsound money function the same.
Since there is no free-trade with the space aliens, how much extra are the poor paying? Yeah, I thought so. Dumb f*cks.
Nobody is doing anybody a favor by taking away their decent paying job, giving them a crappy paying job, maxing out their debt load, and then selling them substandard (often toxic) products.
I have an idea. No tariffs or anything else. The importers and the investors in any form are held personally responsible for anything that occurs with the products, and the workers in the country can use the US courts to sue them for any damages. If a retirement fund has stock from an importer, everybody in the fund is liable.
The problem is that when unsound fiat money meets unsound fiat money the classic rules of economics do not work. Think quantum physics or light waves. A valueless object used to transfer value in an economic transaction suddenly has value. The object no longer represents something of value.
It would be the same as if the title to a house suddenly became unmoored from the house, and house titles were valuable in and of themselves. If house titles were printed at will, there would be no objective measure of their worth, and when a US house title were compared to a Chinese house title, the comparison would be meaningless because the Chinese print titles to ensure US consumers will purchase their goods.
There is no such thing as free-trade in this environment. Period. It cannot exist, and anybody who states otherwise is a fool or charlatan. For the naive, I hate to bring reality into your fantasyland, but the experts do not have a clue how money works. The pundits and political operatives spew the bromides of a bygone era. Adam Smith was obsolete with the creation of the Fed. Keynes, like him or not, requires unsound money, whether he realized it or not.
We are on the cusp of a world-wide central bank credit backed money financial collapse, and the system may correct itself without any intervention. As the Chinese Ponzi scheme implodes taking other countries with it, the US may become a safe-haven, and manufacturing may come back as a result.
Rather than jump between posts, I will add a few related comments here.
According to the stock market, investors are not the best predictors of where money should be invested. They are like any other idiots, and they do not invest according to objective criteria.
Republicans have stated that business people were the best people to run things. Now that they have a business person running for office, it turns out he is not the type of business person they wanted. The correct type is one who has never actually run a business or even worked at a lemonade stand.
Republicans, say it together, “We are no different than the Democrats. We lying sacks of sh*t, and we do not have any principles.” Democrats, you can just replace “Democrats” with Republicans.
One more thing, how is Nicki Minaj looking now?