Notes From Babel

The Fuss over Income Inequality

with 43 comments

I’m not a good blogger.  I imagine most good bloggers are those who have instant and penetrating insight into everything they read in the news that day, and can do nothing other than to release it into the world lest the pressure grow so great that aneurysms and spontaneous combustion become real risks.  Myself, I have no stomach for a lot of political topics, and the topics I do take an interest in typically arrive in a flash, without any particular “current event” to tether or relate it to.  Blogging is about interaction, finding and joining a conversation on the great big internet and, if you’re lucky, moving the debate ahead in some meaningful way.  It can be impolite to spring a long essay on the impact of Chief Justice John Marshall’s nationalism in 19th century America on a poor reader.

All this is to say, I’ve been wanting to say something about the left’s infatuation with income disparity, and this exchange between the folks at Balloon Juice, on the one hand, and Andrew Sullivan, on the other, seemed a good enough excuse.  What follows is stuff that has been rolling around in the old bean for a few weeks.

First, I acknowledge there is some sort of natural law that says that no man can be worth so many times more than the next.  This is not true in practical terms, of course, in a world of sophisticated and international markets.  But whatever OS God installed on our brains was wired well before the industrial revolution and multi-national corporations and world banks, etc.  So we’re left with the reality that no matter how well you make the case that Warren Buffet and Bill Gates and Steve Jobs earned their billions, there will always be something clanging about in defiance in the mind’s basement.

With that said, where is the self-control that should be reigning in that raw nerve that wants to buck against those who have more than us?  Why do we continue to grow more petty and jealous rather than less?  The problem of ostentation does not exist as it once did.  At one time, the lower class lived in literal filth, in such proximity to their own waste that the evidence of their caste was transmitted as much by odor as by appearance.  They were exposed to diseases by the vermin that lived among them.  The fires used to prepare meals and heat their homes posed a real risk of destroying entire neighborhoods.  Likewise, during these times, the wealthy took great pride in advertising their status, generally making a point of drawing attention to the difference between “us” and “them.”

Today, on the other hand, it is hard to tell the difference between the poor and the wealthy.  Typically, the poor enjoy indoor plumbing, microwaves, refrigerators, color televisions, and many other accoutrements of 21st century life.  The wealthy are difficult to distinguish from the middle class.  While the very wealthy will drive expensive cars, they drive them on the same highways as everyone else.  To the untrained eye, a suit looks like any other suit.  And besides, the wealthy and poor alike enjoy wearing board shorts and flip flops.  The gutter debutants and reality tv stars bizarrely have become a sort of symbol of the pop-cultural ties that bind us.

So, perhaps I’m misinformed.  But if so, then that’s a point in itself.  Without actively searching for it, I come across a lot of fuss made over the “income gap.”  But it never seems to be accompanied by any actual particulars about what it is those poor, impoverished indigents are presumed to be lacking.  It always seems to be merely in the abstract:  there is more inequality; the rich, by certain metrics, are getting richer; and the poor, certain metrics, are getting poorer.  And the greedy rich want to keep their money!  Don’t they realize we have a government to run? Don’t they realize the poor—the particulars of their impoverishment we’d rather not state, since either they don’t make for very sympathetic facts, or they’re not the sort that can be fixed with government services anyway—are being crushed under the feet of the rich who are waging war on them?  By God, let’s dust off the Thirteenth Amendment and get to work!

Perhaps the reason for the dearth of details is because the left knows there is no traction to be made by getting specific.  What big spending program would be a good rallying cry to galvanize the fight to empower the poor?  The Kansas City School Experiment, which spent tens of billions on inner city schools in a euphoric spree by liberal policy-makers, with no appreciable effects on kids’ education?   Are there any other sensible plans for what to do with the money?  Or just more pipe dreams?  Conservatives reasonably believe there aren’t any good plans demanding the rich cough up another substantial portion of their money, and thus the only plausible explanation for the weeping and gnashing of teeth over “income inequality” has more to do with a plot to soak the rich than anything else.

This is not to suggest, of course, that the debate over whether income inequality is a ripe issue for debate among macro-economists.  But that is not the nature of the current raw-nerve debate going on in the blogosphere currently.

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Written by Tim Kowal

October 19, 2010 at 6:07 pm

43 Responses

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  1. **** you, too. You think we have to wait until the poor are back to living on shit piles before they’re allowed to say anything? The idea is to PREVENT that from happening.

    No difference between rich and poor? You clueless ****wit.

    Elron

    October 19, 2010 at 7:08 pm

    • I’ve never deleted a comment, but the ratio of profanity to insight in yours is probably the high-water mark.

      Tim Kowal

      October 19, 2010 at 7:31 pm

  2. Tim-

    100% agreement with your reply to Elron. The last refuge of idiocy is profanity, except when I use it!

    The reason income inequality matters has less to do with equitable concerns and everything to do with macroeconomics. Henry Ford paid his workers $5 a day, not because he was altruistic but because he understood that if his workers were paid too little they couldn’t buy his products and the vast consumer economy we hear is responsible for 70% of economic activity might never have taken off.

    Do I think Warren Buffet earned his fortune? Yes, and as you know I worked for him. Steve Jobs? Again, he created something (with Woz) where there was nothing before. Bill Gates? Not quite the same. He bought MSDOS for $60k with money his father gave him. (Like Buffet, Gates was a child of wealthy parents).

    Do I agree that the Wall Street moguls earn their vast fortunes? Not unless they have their own skin in the game. They used federally insured money or capital made possible through the aegis of federally regulated (i.e., safe) markets, took ridiculous risks and paid themselves while their shareholders and employees got hosed.

    The solution is not to cap income but to tax it at much higher marginal rates. There is so much hue and cry about raising the top rate to 39% (slightly less than in the Reagan era), does the right think a 90% marginal rate depresses economic growth? If so, take a look at the 50’s and 60’s under both Democratic and Republican administrations and Congress.

    I hope you’re enjoying your vacation. I’m off to Chicago for 30th Kellogg GSM and 35th Northwestern reunion this weekend. Hope to see you soon.

    Notorious Tom

    Former Colleague

    October 19, 2010 at 7:59 pm

    • Hey Tom!

      My understanding was that the immediate rationale for Ford’s generous pay was to stabilize his workforce and prevent the high turnover from the tedium of the assembly line. Though I do remember reading that he also wanted common folk to be able to purchase his cars. Plus, he was an avowed socialist. But I do accept the general macroeconomic concept you lay out.

      We’ve talked before about our shared skepticism for the value the “Wall Street moguls” have in our economy. Frankly, I just don’t have mental horsepower to understand it all well enough, so all I’m left with is hazy skepticism. At the end of it, though, we created a fluid, national, mystical economy based on made-up value by essentially allowing banks to print their own money by issuing loans worth more than their holdings. We knew what might have gone wrong. And if we didn’t, maybe we had it coming.

      Let’s do drinks soon.

      Tim

      Tim Kowal

      October 19, 2010 at 11:22 pm

  3. @elron (hubbard?) To be fair, the good man preceeded his diatribe by stating ‘im not a good blogger’; with responses like yours, more great essayists would be held down for expressing insights that make sense. Thd truth is that with advancement in modern society, access to the internet, educational channels (im not talking about the learning channel and ish like that elron), and trade, we
    as a society are as richer than we have ever been. While we have a long way to go, we are making headway.

    rey

    October 19, 2010 at 8:06 pm

  4. This topic upsets me like few others. What right does anyone have over the wealth or production of another? or to judge when its reached an unacceptable level? and what benefit is there in inhibiting the freedom of individuals to enter into contracts by punishing them with confiscatory tax rates like the rates near 90% in the mid 20th century in America? After all not only does the producer lose the fruits of his labor he may withhold his labor all together robbing otherwise willing patrons of his goods or services. If we really think penalizing productivity is a good idea we shouldnt be surprised when we don’t have the amazing access to cheap technology and goods that we currently have. Just one look at my iphone makes me want to ensure that productivity is not stifled by disincentives. If we decided a millionaires tax was a good idea it may have never been developed. Nor do I think Steve Jobs wealth takes away from mine. In fact I believe the money I gave him for my iphone makes me richer. It is worth more to me than the money I spent for it. Thats simple market economics but the central planning crowd cant wrap their mind around that even though they find themselves funding the rich and the fortune 500 companies they later rail against and beg the government to confiscate the capital they gave willingly in free exchange.

    Simply put if you think Warren Buffett is too rich don’t buy Berkshire Hathaway or patronize any of its companies, and if Warren Buffett himself thinks he is too rich let him give his money to charity or write a check to the treasury if he wants, but don’t inhibit other free citizens to pursue prosperity. You will do so to your own peril. Frankly I far prefer the philanthropy of the rich to the wealth distribution of the Govt.

    Also there is the issue of resource allocation. Who will spend money more carefully than the one who earned it? And who should be trusted with more money than the one who was frugile enough to amass great wealth? And why is it less stimulative for the rich to spend their wealth on fancy cars and houses than for Congress to redistribute it to the least productive sectors of society? ex. failed banks and car companies.

    I would assume that in a free society there would be a high degree of inequality. Some people might value free time more than wealth and choose to live modestly while other may value wealth and give great sums of time pursuing it. Each must take responsibility for their choices. That is what makes America what it is. Different pursuits and different outcomes. To quote Thomas Sowell “everyone likes to talk about the haves and the have nots…..no one talks about the do’s and the do nots.”

    Josh

    October 19, 2010 at 8:39 pm

  5. Time to do some research, Tim. Let’s drop you and your two children into the Los Angeles basin and have you-all live on a family income of $60,000 per year. As contractors, of course – not employees, because that’s so last century.

    Hmmmmmmm….income, sales and FICA taxes, $8,000. Two small Kia automobiles, insurance and gas, $9,000. Health insurance, including the out of pocket and deductibles, $18,000. Rent/utilities for a small three bedroom house, $20,000. OK – now here’s the fun part: food, clothing, entertainment, family travel, education, saving for retirement, life insurance, disability insurance, saving for college, driver’s ed and cellphones for your teenagers, etc. – -about $400/ month. For all four of you.

    You can do it – you just said so, didn’t you? And after all, you’re so smart and smug. You can figure out how to make it all work.

    Now, tell us all how. And then we’ll stop with that whole, evil “envy the rich” thing.

    Dollared

    October 19, 2010 at 10:15 pm

    • I’ll try to use my smarts only and leave smugness out of it.

      First, I did not say that being poor is a picnic, only that poverty in the present day does not rise anywhere near the level of brutality it did in previous eras. And thus, it doesn’t seem the current campaign against “income inequality” could be explained other than by contempt for the rich for the sake of contempt for the rich. (Again, there are certainly reasons to be upset with certain bankers and other paper peddlers. I harbor a soft spot for Jeffersonian “agrarian virtue” and mercantile skepticism, myself. But this has been around for centuries, and doesn’t seem to explain the hot-headedness on the issue today.)

      As for your hypothetical, without hesitation the first thing I’d do is move out of California altogether. The cost of living is ridiculous here. Could probably stretch and make do with one car. Again, far from comfortable, but we’re well out of range of life-or-death humanitarian concerns here. We’re in the land of macroeconomic policy considerations, as Tom explained above.

      Tim Kowal

      October 19, 2010 at 11:05 pm

      • “As for your hypothetical, without hesitation the first thing I’d do is move out of California altogether. The cost of living is ridiculous here. Could probably stretch and make do with one car.”

        Because employment opportunities abound everywhere right now and, God forbid, you actually have a mortgage, you’re so far upside down you can’t sell your house without owing the bank money at closing.

        Mark Boggs

        October 20, 2010 at 4:52 am

        • I own a house, too? Unless I took out a second to buy a pair of jet skis, under the anti-deficiency statutes any deficiency after selling the house would be forgiven.

          But this is making it harder for me to tell: are you making the heart-strings case or the macro-economic case for reducing income disparity?

          Tim Kowal

          October 20, 2010 at 7:10 am

  6. “penalizing productivity”

    I call BS on this phrase. There’s plenty of fat cats getting government bailouts and contracts or even CEO’s who have failed spectacularly getting their wealth on or even the hedge fund managers who produce what? Scandalous Wall Street failures? But, yes, let’s frame it as the “productive” versus the …what? The unproductive couple as mentioned by Dollared above? Yes, we all know that the money you take home automatically justifies the “value” and difficulty in what you actually do. Those lottery winners work their asses off.

    I’d much rather run a company into the ground and get my big golden parachute than sit around dealing with 30 second graders all day, even for 9 months of the year for 30,000.

    And the point of the kerfuffle was that The Balloon Juice bloggers thought it a bit much to be required to show such fealty to the well to do for all the “sacrifices” they make in paying taxes, as though they’re the only ones doing any sacrificing.

    And the idea that people stop “producing” because they’re offended at the taxes they’ll have to pay is literally silly. So all these guys making a million dollars are truly contemplating a move into the $40-50,000 pay scale just because they’re tired of getting screwed by the man? Must be nice to have the option to stop producing. Most of us try that, we starve. But then, apparently, we aren’t “producers” by virtue of our meager earnings.

    Mark Boggs

    October 19, 2010 at 11:01 pm

    • Well I call BS right back. Generally speaking productivity is represented by wealth. We vote with dollars. Are there exceptions? There always are. Does that make the generalization untrue? No.

      If you were convinced that you could be wealthy by playing the Lottery or by starting a company and running it into the ground while providing yourself a golden parachute then how come you and your hard luck examples of the working poor don’t do either of these and turn wealthy! It is so easy and has nothing to do with providing value for people! Their just lazy fat cats! The truth is not even you believe your own BS. Otherwise you would be complaining about your high tax bracket or liberating the poor by distributing your own wealth.

      As for your childish assessment of taxes not discouraging productivity you are dead wrong. To keep from talking about scenarios which are nothing but speculation I will use myself as an example. I currently work in an industry were a little over half of my wages are “incentive” income or commission. I make about the same pre tax per year as many teachers or other union employees but because “incentive” income is taxed at a much higher rate than wages I take home less. As a result I am currently looking for ways to turn more of my income into wages as opposed to incentive income to mitigate costs. I will likely even change careers. This robs both me and my employer of options and It most certainly does change my behavior. It is utterly naive to think that someone might go on working 12 hr days and continue to look for new innovations even after incentives are taken away. Anyone worth their salt will naturally look for other more productive ways to spend their time.

      Also Tim is 100% correct. You are not worried about people starving in the streets. You just cant bare the thought of them have to live without a big screen tv or cell phone at least not while Donald Trump parades around in a Limosine. You want to spare people hard choices, but I have studied many who are wealthy. 80% of which in the United States are new wealth. Without fail the difference between them and other is DELAYED GRATIFICATION! To summarize most who are wealthy will point out that they spend their money on assets while the poor spend their on liabilities. While the poor buy nice jeans, the future rich invest or save money to start a business. While the poor buy a house to live in the future rich buy a house to rent while living in a dive until the rental income buys them a house. You want to protect people from the hard choices that teach them to create wealth, and you do them a diservice.

      You are exposing a true ignorance of economics. Wealth is created not distributed…..until you learn that the policies you advocate will create poverty as they have at most times in most places in the world. The wealth of the west is the exception not the rule.

      Josh

      October 20, 2010 at 10:11 am

      • So again, the wealthy’s wealth justifies and affirms the ways they made (or inherited) it. And the poor are poor because they’re just generally stupid.

        And a 5 cent per dollar extra tax on every dollar you make over $250,000 is gonna make you take your dolls and dishes and go home?

        Got it.

        Mark Boggs

        October 20, 2010 at 10:37 am

        • Ok, so its clear this was never a serious debate, but I will leave you with one thing. Just because the movies you watched as a kid painted all rich people as greedy and dishonest and the poor people as hard workers and victims of oppression doesnt make it so.

          Neither of my parents graduated high school and we were poor at times but they worked hard and I had a good life, went to college and now I consider myself reasonably wealthy. My wifes parents came here with nothing and dont even speak english to this day and within one generation their family has become wealthy.

          You cannot argue with reality. As the rich get richer the poor also get richer, and equality is not my goal…prosperity is. There is no such thing as equality.

          Josh

          October 20, 2010 at 11:03 am

      • What tax provision are you referring to that taxes “incentive income” at a higher rate than wages? You may have more tax withheld from a bonus or commission check than you do from your regular paycheck but when you prepare your taxes it all goes into one pot to determine your Adjusted Gross Income. Moving more of your compensation into wages and out of commissions may have an affect on your withholding rate but part of that affect could very well be to raise the withholding rate on your wages. This scheme will do nothing to lower the amount of tax you owe and could, from your employer’s point of view, lower your incentive to produce.

        Lawnguylander

        October 20, 2010 at 10:58 am

      • “Without fail the difference between them and other is DELAYED GRATIFICATION! ”

        Oh, you mean like the HFT fraudsters who invest for 11 seconds? THAT delayed gratification?
        http://dealbook.blogs.nytimes.com/2010/05/17/speedy-new-traders-make-waves-far-from-wall-st/

        dcd

        October 25, 2010 at 8:25 am

  7. Dear Mr. Kowal,

    This is my favorite of your posts. It’s warm, personable, and audacious, not unlike a Blondie video.

    I applaud your brash courage in selecting what must be, with the possible exception of atheism, the world’s absolute-least-popular argument. Even if this point of view were defensible, the only thing that would save the preacher of such a sermon from a decidedly impolite demise would be an extremely well-prepared (not to mention well-paid, ha ha!) team of bodyguards.

    You crack me up. Well bloody done. Ha ha!

    And to address your detractors: you outraged sorts are taking all of the dignity out of an otherwise beautifully obnoxious piece of writing.

    Yours Truly,

    -Both

    BothEyesShut

    October 20, 2010 at 8:09 am

    • You are a true master of interlacing compliments with meaning. This is a powerful skill indeed.

      The real trouble for someone like me is that I honestly believe what I say in one of those preliminary paragraphs that there is something fundamentally unnatural about a person earning powers-of-ten more than another. I really have no intrinsic love for the rich. And nor, most certainly, am *I* rich! In fact, I believe I have more cause than the poor to gripe against the rich: I work 60 hour weeks, endure terrible stress, forgo weekends and go three years without a vacation. Yet, I’m contemplating taking my wife along to a work-related convention in next month to make sort of a vacation out of it, and it looks like we’d have to float the expenses on credit cards for a few months. Or perhaps put a temporary freeze on contributions to our already meager retirement fund. Seems the choice ought to be stressed-out-rich-bastard, or carefree-enjoy-your-nights-and-weekends-poor-folk. Somehow I’ve managed a way to have some of the worst of both worlds.

      So to be clear, I don’t harbor a particular love for the rich. But I don’t pin all my problems on them, either. As much as those “greedy Wall Street fat cats” screwed things up, good-nik demagogues who artificially-inflated home prices in the name of handing the “American dream” to every gardener and janitor played a roughly equal share. And they’re still doing their share by continuing to preserve that artificial value.

      Thus, it seems strange to me that were not upset about EVERYONE who benefited from the system. Or that we’ve chosen to be more upset at those who prospered, usually regardless of whether they did so honorably.

      Tim Kowal

      October 20, 2010 at 9:01 am

      • I hate taking serious things seriously, and especially when they deserve to be taken seriously, so I will only reply that if your singular perspective has done anything well, it’s to note that though a balanced hand is necessary in such matters as the distribution of wealth, there are important considerations on both sides of the scale.

        Both sides.

        My, my… I’m certainly glad you’re the one noting it, though. I’m a sensitive writer, and my feelings are hurt rather easily.

        Cheers.

        BothEyesShut

        October 20, 2010 at 9:33 am

  8. Tim,

    Just trying to point out that you make this whole upward mobility thing sound really easy considering you’re glossing over the ease with which our hypothetical family quits their jobs, finds new ones out of state, sells their house, etc.

    Mark Boggs

    October 20, 2010 at 9:10 am

    • Perhaps. But then again, if I had my way, it *would* be easier to get jobs, because it would be cheaper to employ people. The trade off with forcing employers to pay more to employ people is, in exchange for losing freedom to move around in the market to different jobs, employees stay put in one job and dare not move for a bit more money. This is particularly exacerbated in California, in comparison to states like Texas, where I understand it’s much easier to get a job and have a nice life.

      Tim Kowal

      October 20, 2010 at 9:20 am

      • So now the average American worker, the “folks in the Heartland” and flyover regions that conservatives love to wax rhapsodic about are making too much money, or at least demanding too much money? Or is it that pesky minimum wage thing that seems to be so misplaced?

        And to clarify, I go about my day to day life without much care for the wealthy one way or the other. They kind of have a handle on the system so they will always get their’s politically and economically, but many of us unproductive, common folk tend to bristle when we’re told that we need to do more to appreciate the plight of the upper crust.

        Mark Boggs

        October 20, 2010 at 9:46 am

        • I’m not sure I said quite that. I’m saying there are effects when the government puts its thumb on the scale, and not all of them are beneficial to employees, though they may be done in their name.

          As to your second point, I’m with you, except that I also bristle when those who purport to speak for the “common folk” stir up firestorms against the “greedy fat cats.”

          Tim Kowal

          October 20, 2010 at 10:36 am

  9. I fully agree that the free-market should determine the value of each individuals contributions. Kudos for reminding us of the power of the collective economy. But I wonder why so many socialists on the right refuse to apply that same free-market standard to taxation? If the price of a service or good should be set to what the market will bear, why not with the top marginal tax rate?

    I say we let economics run its course here and we put that top marginal rate right at what the market will bear – set it just below the point that our CEOs and hedge fund managers start emigrating to Mexico. They seem all to eager to immigrate to the US, so I can only conclude that we’re just not extracting the market worth of the American Dream.

    Martin

    October 20, 2010 at 9:58 am

    • Certainly taxation has market implications that can be measured for optimum levels same as supply and demand as shown in the Laugher curve, but I think that should also be tempered by the rights of the individual to their own property and fruits of their labor.

      Josh

      October 20, 2010 at 10:16 am

      • And it would be. At issue is “What is the government value-add to individual property and labor compensation”. Everyone immediately points to entitlement programs, as they are direct, but nobody points to the indirect ones. Let’s consider sports salaries. Salaries might appear to be completely driven by talent and effort – but they aren’t at all. Sure, the shortstop getting paid the most is predictably the most talented/hard working, but you could cut salaries by 50% across the board in baseball and that’d still be true.

        Salary is driven by the same supply/demand forces as everything else, except in the case of baseball the government has given players and team owners a massive earnings advantage that doesn’t apply to other parts of the economy. Major league sports are legal monopolies by Congressional approval. If we remove this artificial market constraint, and add the 100 or so new teams to the league that the market would likely support, we’d quadruple employment in that industry and drive salaries down probably by 70%. The same talent would rise to the top as now, so that wouldn’t change a bit. But all of that extra salary that players earn now (and who can say really what it would be – that could be argued forever) comes 100% courtesy of the federal government.

        As a citizen I would like the federal government to not provide these kinds of advantages to the privileged class (I think we can agree that Derek Jeter is a privileged class) or, when they do, to extract a reasonable tax compensation for doing so. I’m not suggesting they be taxed at 90% – I’m not suggesting any kind of putative tax rate at all. For all I know, the rate is right where it ought to be. So assuming we don’t want to throw baseball and other sports into a crisis, how do you set that number? Well, I’d say turning up their tax rate just shy of when they’re no longer willing to play in the US would be fair. It doesn’t rely on any individual or group to determine what the rate ‘ought’ to be, we let the individuals being taxed determine the rate. That’s the free market approach, is it not?

        Martin

        October 20, 2010 at 10:52 am

      • And let’s also directly address the issue of “tempered by the rights of the individual to their own property and fruits of their labor”

        When we talk about construction worker putting in 40 a week, physical labor and lacking health care and barely making enough to provide for a family, there’s no consideration for “the rights of the individual to their own property and fruits of their labor”. Instead we get a lecture on the free-market and a suggestion that perhaps that individual should have attended a good university (using what funds, we never explore) and sought out a different career path (ignoring the legions of people with B.A. working at Starbucks, if they have work at all).

        But once the topic shift to those individuals that have benefitted disproportionately from the American Dream, and without denying any part of the talent and hard work that went into achieving it (credit where credit is due) in the context of how to get the economy on track and address the national deficit, suddenly the free-market is no longer the convenient magic-bullet to explain why the bottom 80% are out-earned by the top 1%, but now we need to get into matters of principle and say “whoa, whoa, what about the rights of the individual to their own property and fruits of their labor.”

        Yes, indeed, what about those things that are too difficult for us as a society to discuss in the larger context. If we’re going to pick and choose when the free-market should be the end-all determinant in welfare, and when we’re going to ignore that and stand on the rights of the individual, let’s try picking to do it the other way around.

        Let’s have the government establish labor rates based on the complexity of the task, call them ‘marginal rates of labor’ and then pay people based simply on the number hours of work they do. That would seem to broadly respect ‘the rights of the individual to their own property and fruits of their labor’. And then let’s set income tax rates according to the free-market at levels that keep America’s economic engine going, but not so much that people emigrate.

        Granted, that probably sounds horribly, horribly unfair and yet all I’ve done is taken the two arguments used to justify the status quo and reversed their context. If they were sound before, they should still be sound, no?

        I’m not actually suggesting that America do any such thing. I just wish that any argument used to explain the income disparity in America be applied uniformly. We constantly hear about the risks that hedge fund managers undertake and why they should be compensated, but never the risks that police undertake when complaining about their fat government salaries (which, surprisingly, are always lower than what those concerned with high taxes think is necessary to make ends meet.) I don’t know about you, but I think I’d much rather be on the end of the worst-case scenario for the hedge fund manager than for the cop. And to be paid a fortune for the privilege, woo!

        I don’t think consistency is too much to ask for.

        Martin

        October 20, 2010 at 12:33 pm

        • What determines the wage of a construction worker? Supply and Demand. The price mechanisms push people naturally to the highest needs for labor or anything else. Why else would anyone want to be an accountant? We would all be rockstars and actors. I have never said that anyone should do anything other than what they want to do. Just take responsibility for your choices. You don’t like what construction pays? Find a niche, start a business, learn something else.

          I personally would rather be a profesional musician, but the supply is very high so the wage is very low with small exceptions for artists who appeal to large segments of the population. I have a choice to make I can tour non stop for years making nothing with hopes of big money later or I can take a look at the market and find a profession that has more demand that will pay me more to by pass my first choice.

          I don’t turn in to a whiny baby and start crying about how my music is really better than these multi million dollar artists. I accept that people demand their service more than mine. I dont ask the govt to mandate fair wages for musicians or anything else. Accept reality would you, and let people live the life they choose. Risk and become rich or not. Value time or money but few have both. Their is a price to be paid for all choices but you want to take the natural mechanisms and distort them because you dont like reality.

          All you can do to try to create your version of “fairness” is to take options from other people. I reject that idea. We are not helpless, we can provide for ourselves.

          Josh

          October 20, 2010 at 2:09 pm

  10. Tim,

    If my bristling at being told I’m not fellating the productive, wealthy folks enough for all their pain and suffering makes you bristle and is some kind of call-to-arms for class warfare, we’ll just have to live with it.

    Mark Boggs

    October 20, 2010 at 10:53 am

    • What is it with this issue and fellatio? The Balloon Juice guys couldn’t seem to make their point without about a half dozen references to it.

      Tim Kowal

      October 20, 2010 at 11:02 am

      • I guess because it feels like that might be the only thing that pleases those who think the “productive” don’t get enough props.

        Mark Boggs

        October 21, 2010 at 8:19 am

  11. Josh,

    It would be great to have a serious debate about this, but when it is just generally assumed that all poor people have put themselves in their position and perpetuate it through their own stupidity while every well to do person has pulled themselves up by their boot straps and inherent self-sufficiency, it is hard to be serious.

    As I’ve maintained prior, wealth is not necessarily an indicator of hard work. I understand the nature of our system and that some will have more than others. When an average CEO makes 400 times what his or her average employee makes, as Tim points out, this just sort of feels wrong.

    Mark Boggs

    October 20, 2010 at 12:22 pm

    • So it seems clear the issue isn’t that we have a problem of brutal poverty, but that it’s too hard to get comfortable. How easy should it be? And even if that’s a legitimate aim of government (I doubt it is, in most respects), how do we make it easier for some without making it harder for others? I’m thinking of public employee unions, as an example.

      Tim Kowal

      October 20, 2010 at 12:59 pm

      • You’re speaking of wealth, not earnings. Nobody on the left gives a damn about wealth, isn’t proposing taxing wealth, so please stop shifting the argument.

        The argument from the left is that we have a group of people with very high earnings (meaning that they have jobs foremost) and a group of people with zero earnings, and right above them a group of people with part-time earnings. And if you look at the distribution of unemployment, it’s the bottom of the earning ladder that the unemployment has taken the greatest toll.

        So the real question is how do we manage high-earnings and high corporate profits flowing to investors along with high unemployment or underemployment and a high deficit. Or are we to accept that 10% of the population is quite literally ‘not needed by society’ and because we have a budget deficit they’re fully on their own, and just call it a day?

        Again, the people that made this about the rich were, well, the rich. It’s not and it never has been. It’s about those that are getting ahead financially in this economy versus those that want to work but can’t. Nobody is asking for welfare – they just want a job so they can *earn* a living. Corporate profits and executive pay are such that clearly the free market has enough excess money to provide those jobs, to upgrade our infrastructure, to do all manner of beneficial things for society. But enterprise isn’t stepping up. They’re taking those profits and handing it off to investors and executives instead.

        Liberals would *love* to skip the taxation route and have private enterprise create these jobs and get the economy going again, but it’s not happening. They’d even love to pay down the debt on the tax burden of their own jobs. So what’s left? Taxation.

        Give the left a better alternative to solve the nations economic problems, but don’t lie about this being about the rich. It’s not, and it’s never been. Nobody is proposing taxing wealth and everyone talking about ‘the rich’ know it.

        Martin

        October 20, 2010 at 2:26 pm

        • It seems like you’re making conflicting points here. One, that the rich are making too much profit; two, that the non-rich have beneficial services to contribute; but three, the rich aren’t interested in profiting from employing the non-rich and would rather waste it by paying investors and executives more than they’re worth. This is obviously absurd, so it can’t be what you meant. But it is the only meaning I can make out from your argument here.

          Then, again, you seem to double down on that very argument when you say “Liberals would *love* to skip the taxation route and have private enterprise create these jobs and get the economy going again, but it’s not happening.” Martin, if private enterprise is not producing enough wealth right now, then there are two and only two logical possibilities: (1) it will continue to not produce enough wealth; or (2) it will adjust and re-orient itself and start producing enough wealth. If (1), we screwed, and maybe you’re right: let’s just make make like vultures and feast on the dying corpse. But if (2), then we’re only prolonging the adjustment and re-orientation period and hurting ourselves in the process.

          Tim Kowal

          October 20, 2010 at 7:00 pm

      • Again, you miss the point. My problems with income disparity aside (and you basically admitted that the disparity to you doesn’t even feel right), the disagreement was about some folks like Sully and James Joyner insisting that the “successful” bear the burden in society and shouldn’t they just be shown a bit more love by all us deadbeats for their largesse, as if they’re the only ones getting up every morning to do a job.

        Mark Boggs

        October 20, 2010 at 6:47 pm

        • I know that’s the debate I was nominally referring to, but I was making some broader points. I thought the “show the love” point was kind of silly, at least if taken literally.

          Tim Kowal

          October 20, 2010 at 7:02 pm

    • That is the biggest straw man ever….again. Not serious.

      Josh

      October 20, 2010 at 2:11 pm

  12. “Don’t they realize the poor—the particulars of their impoverishment we’d rather not state, since either they don’t make for very sympathetic facts, or they’re not the sort that can be fixed with government services anyway…”

    Time out.

    Some of us in this nation have learned the truth of the whole “if you work hard, you’ll be rewarded” nonsense. We’ve also learned that you are not specifically able to control your situation- you can not do whatever you want to do, as you will be blocked by others or societal constructs.

    This falls into the insinuation (as usual) that all the poor people are lazy, unwilling to work and seeking free handouts to live the good life.

    I have a question… Where do the people- and there are a few million, at least- like me fit in?

    As an example, I have my B.A. from a top-grade major university, a Mensa level IQ, and worked as an award winning virtual reality and multimedia developer for 8 years straight, 7 days a week, 10-24 hours a day.

    Now, for almost 8 years I have been unable to find ANY type of work I can perform in our society without receiving full, quality, no-cost physical and mental health for the genetically inherited anxiety disorder I have that prevents me from doing most of the tasks required to function in ANY work environment (or from home). No, I *can not* work at McDonald’s- and not from some stubborn refusal, but because I’d collapse on the floor carrying you your order and start screaming for help from the anxiety attack I just had.

    Where I used to make nearly $70k, I now have $0 to my name. No savings, no assets, few belongings. I missed my chance to have a wife and kids in all likelihood.

    I have been denied disability (you know, Conservatives don’t believe in anxiety disorder), I have JUST been approved “food stamps”- after 7 years- for a whopping $250 a month for two people. And, while I’ve applied, I’ve been told I’m not likely to get any cash allowance or allowed to get on medicaid.

    There are a TON of people in this nation who need to actually experience how miserable life is when you don’t even have $2. I literally can not buy a couple double cheeseburgers from McDonalds. I can not go anywhere- but at the same time have to get out of the house to stop from going insane (and by house I mean my mom’s, of course, I don’t get to have my own life)- so I go to Starbucks to have a water.

    When exactly does the high life kick in from sitting back “waiting for handouts”? How exactly does my inability to get any type of mental health counseling (Community? Have to be suicidal or homicidal! Pro bono? Don’t make me laugh) combined with career counseling (try finding any where the career counselor will listen to you say what you can’t do in a work environment)… There are no sources of aid.

    There’s no taking it easy. There’s no joy. There’s no hope.

    My former work reflected my utter LACK of laziness. My skills had been A+++ for my field.

    Now I hear everyday how I’m part of the “entitlement” problem. It’s cliche and untrue, and insulting. The people sitting back who “don’t make for very sympathetic facts” or who can’t be “fixed with government services anyway” is about 2% of the people in my situation. Those 2% are lazy, but they’re not living. Yet they’re happy not living.

    Don’t lump those of us who want to live our full lives, but can’t due to circumstances beyond our control- due to people voting people back in to power who will repeal the last hope I had remaining, health care reform, where I *finally* would have received the aid I needed.

    Why do I resent the rich? Because I’m not? No. It’s because when I worked- and worked harder than most of them ever dreamed of in their life- I not only didn’t get rewarded for working hard… I was not paid by one company (ruining my credit to this day) and screwed over at every other company, and left by society to go die in a corner.

    I’m sorry, I’m not going to feel sorry for wanting a millionaire worth $2 million to give $1 million in taxes, where they will STILL be a millionaire, in order to go into a tax pool that would treat their fellow citizens who have no other hope- rather than see them keep that extra $1 million they “earned” (by doing nothing, in most cases, but investing) so they can afford their 4th home.

    America will not be great again until we have single payer health care, and rectify the imbalance in the classes. Want to call that wealth redistribution? Go for it- it’s what America is founded on… doing the right thing. Not embracing greed and corruption.

    Jaym

    October 20, 2010 at 6:47 pm

  13. http://www.esquire.com/blogs/politics/recession-what-recession

    “Just a brief observation: as I write, the Dow is up one hundred fifty-plus points on the day, to something over 11,100. It is up more than 4,500 points since its recessional low point — 6626.94 on March 9, 2009 — or nearly 70 percent in less than two years. I am just guessing here, but I would bet that it has never achieved that much growth in that short a time in its history.

    “In any other climate, investment banks would be crowing over their profits, and politicians would be stampeding to the microphones to claim their share of credit. But this is a recession (okay, officially it no longer is one, but as with obscenity…), and there is no advantage to bankers or politicians in pointing out the blindingly obvious: that the economic health of this country can no longer be gauged by the height of the Dow. Bragging about massive profits and fat returns at this point would be vulgar, if not outright suicidal.

    “Still, it bears pointing out that Wall Street has figured out how to make money — megatons of it — in the midst of an economic disaster, and that the method does not involve job creation. Remember, too, that the Dow measures expected future value, and it is signaling that the future value of American corporations is skyrocketing at a time when 17.1 percent of eligible Americans are out of work or working reduced hours. The unemployed who are pinning their hopes to the GOP and its corporatist platform might want to ponder that for minute or two, and ask whether — to update the old saw — what’s good for Goldman is good for America.”

    Read more: http://www.esquire.com/blogs/politics/recession-what-recession#ixzz12xyLjDXK

    Mark Boggs

    October 20, 2010 at 9:59 pm

    • This is interesting, though I would have been interested to know what the author suspects is the cause. My suspicion is that as businesses reorient themselves, shed waste, and start taking steps in new or different directions, they’re finding profits even while they’re not growing in terms of jobs. Maybe even still shrinking. What’s the conclusion? That businesses suddenly learned how to operate with us stupid nine-to-fivers suckling at their teats? Hardly. The reason companies don’t reorient other than in economically dramatic circumstances like we have now is because it’s expensive. You have loads of employees who need to be retrained or reassigned or replaced, though you don’t have the model set quite yet. Shifting takes some time. Waiting is hard, but it shouldn’t get us thinking it will be interminable, or that the market suddenly learned to operate without jobs.

      Tim Kowal

      October 20, 2010 at 10:54 pm

  14. […] a comment » I recently wrote about why, under a certain definition of the word, no one knows any truly “poor” […]

  15. […] couple months ago, I blogged about the so-called “problem” of income inequality, arguing that the problem simply […]


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