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Politics : The Trump Presidency -- Ignore unavailable to you. Want to Upgrade?

To: Lane3 who wrote (15663)	4/21/2017 9:12:07 AM
From: Lane3	Read Replies (3) \| Respond to of 365050

The Bloomberg article: 'Fight Inequality!' Is a Poor Rallying Cry 21April 20, 2017 4:16 PM EDT ByTyler Cowen From Cowen's blog: Why don’t people care more about economic inequality? by Tyler Cowen on April 21, 2017 at 7:55 am in Economics, Philosophy, Political Science \| Permalink That is the topic of my latest Bloomberg column, here is one bit: One possibility is that a lot of talk about inequality gives the audience the impression that it is inevitable, and thereby renders potential remedies less urgent. Another speculation is that human beings are constantly evaluating the status of others. To the extent analysts reiterate that some group of citizens doesn’t have as much, maybe they’re actually reminding us that those citizens hold a lower social status. Perhaps subconsciously, we then respond by thinking those citizens deserve less, or by downgrading the urgency of their needs. Another possibility is that talk about economic inequality increases political polarization, which lowers the chance of effective action. Or that criticizing American society may cause us to feel less virtuous, which in turn may cause us to act with less virtue. Perhaps if critics of inequality praised this nation more for what is has done to redress inequality, rather than criticizing it for the gaps, that might cement a self-image of Americans who are capable of tackling this problem, and thus spur interest in additional progress. That mechanism shouldn’t sound so strange to anyone who has tried to raise children. When I bring up such points in dialogue, I’ve found that a lot of my fellow academicians retreat to the moral platitude that the “good guys” simply need to fight harder against the special interest groups. Maybe so, or maybe that response is just another way of digging in deeper to what so far has been a losing battle. The reality is that income inequality has gone up a great deal since the early 1980s, and we haven’t done so much to reverse the basic trend. The potentially egalitarian effects of tax increases under the past two Democratic presidents and Obamacare have been outweighed by globalization, which benefits most those individuals who can access global markets, and by increases in the returns to highly skilled labor. The reality is that government expenditures have not become radically more poverty-reducing over the last few decades, although we do send more resources to the elderly. Do read the whole thing, the various biting comments about other academics are in other parts of the piece. First comment: 1 rayward April 21, 2017 at 8:12 am Cowen’s post is good. I will add three points. One, inequality is a good thing (incentives and all that) until it’s a bad thing (financial and economic instability and all that), but the dividing line between a good thing and a bad thing is very difficult to discern, at least until a financial crisis or other adverse event make it apparent. Two, even knowing the dividing line doesn’t inform us how to mitigate inequality, to reduce it to the level where it’s a good thing and not a bad thing, without unintended (and negative) consequences that might make matters worse not better. Three, excessive inequality, like all imbalances in a capitalist economy, are self-correcting, absent intervention by governments and central banks, although the self-correction can be very painful. Cowen seems to believe we are on a path to a self-correction, a Great Reset, the end result being a return to faster economic growth and shared prosperity. At least until we return to another cycle of excessive inequality and another Great Reset. We are doomed to repeat the cycle because, well, that’s why it’s called a cycle.

To: Lane3 who wrote (15663)	4/21/2017 12:08:00 PM
From: combjelly	Read Replies (1) \| Respond to of 365050

And when we have examples of economic inequality having been successfully tackled, it was directed at wealth and inheritance, as in nobility and landed gentry, not income. I could point at The Great Compression, but the "landed gentry" had already taken it in the shorts with The Great Depression. What it did was slow their inevitable crawl back to Gilded Era heights. The problem is the old bugaboo of Adam Smith, rent seeking. Because it isn't so much the inequality that causes problems, it is the gradual closing of opportunities and advancement that the rent seeking causes for all but the wealthy and eventually the wealthiest. Maybe we need to make sure we have a major economic collapse every 40-50 years. Along with putting high top tax rates and investment controls in the wake of such collapse. Having a major war as part of the recovery doesn't hurt... Because unless the pool of wealth held by the top few percent isn't reduced, they will just lobby and pressure until the restrictions are lifted and they can surf to owning a large percentage of the overall wealth again.