Earlier this month, I offended a number of readers with a column suggesting that if you want to see rapacious income inequality, you no longer need to visit a banana republic. You can just look around.Counterpoint, from Will Wilkinson:
My point was that the wealthiest plutocrats now actually control a greater share of the pie in the United States than in historically unstable countries like Nicaragua, Venezuela and Guyana. But readers protested that this was glib and unfair, and after reviewing the evidence I regretfully confess that they have a point.
That’s right: I may have wronged the banana republics.
There are many possible causes of a high level of income inequality. The historically most typical cause is the concentration of political power in the hands of a predatory elite. This is the main explanation for the typically high levels of Latin American income inequality. This is not the main explanation for the high levels of income inequality in the United States and Great Britain. The main explanation for widening income gaps in wealthy, advanced liberal democracies is a complicated combination of (1) increasing economic returns to the acquisition of high levels of skill; (2) low supply of highly-skilled workers relative to demand; (3) changes in the way executives are paid, and in the norms governing executive pay; (4) technology-driven magnification of top rewards in "winner-take-all" or "superstar" markets; and (5) relatively low political demand for higher levels of progressive redistribution. Unlike expropriation and monopolisation by ruling elites, none of these causes of rising inequality are particularly objectionable in their own right. In a plutocratic California, it bears pointing out, the state's fourth wealthiest person wouldn't have become such by running a company that creates immense consumer surplus by dramatically lowering the transaction costs of selling goods to a large market.Keep in mind that I have no real experience in politics or macroeconomics. That said, and while I believe that Mr. Wilkinson has a point, I only know what I see. And what I see is the rich getting extremely rich, wanting to stay that way, and being willing to do anything and run over anyone in that effort.
I'm painting with a broad brush, to be sure. But what am I supposed to think when I hear that arms of my federal government want to save pennies by no longer extending unemployment insurance but spend much more by extending tax cuts to people that make more money in a week than I will ever see?
I'm going to start thinking crazy thoughts. Like I'm actually living in Bolivia in 1986.
The problem isn't that wealth is acquired in a predatory way in this country -- it's the way that wealth is protected. Our representatives in Congress claim to serve the public, but they serve the people that make the campaign donations. So they phase out an estate tax that only really affects the top 2% of taxpayers and cut taxes when we have an enormous budget deficit, and we create tax credits for corporations, despite the fact that those corporations are cutting jobs or shipping them overseas. So yeah, our schools are failing, our infrastructure is a mess, our country has a 10% unemployment rate, and people are losing their homes. But our taxes are low.
ReplyDeleteMy view is a little different. I grew up lower middle class, and my family didn't have the money to send me to college. So I worked my ass off to make near-perfect grades and stay involved in community and extracurricular activities so I could get scholarships. I got some, but also got a job to help out. Both of my parents worked really hard to help me too. I went to college for 4 years, then got married. I got into professional school and my husband and I took out loans so I could get my doctorate.
ReplyDeleteIt took lots of studying and sacrifice, but I made it through and finally got my loan paid off. My husband works in the oilfield and busts his butt everyday at his job. Though we are not "rich," we are doing fine. I just hate that people who work hard to accomplish something are villified because they don't want to give half of it to the government.
I think I deserve what I earn, and don't mind paying my fair share of taxes, but I feel that as my business grows, I will be punished for doing well. It's almost like the government wants to discourage people from getting into that upper tax bracket.
The top 2% do hold a lot of wealth, but they also pay a whole lot of taxes. I just don't get the argument that, "They have more than I do, and it's not fair, so they should give me some." If you want to make that kind of money, you've got to put in the investment and take some risks. You're not going to do it just by showing up for work every day. That will keep you stagnant or allow you to progress slowly.
I think people deserve what they EARN, and that's it. If you come up with a product or an idea, and you put in the time and money to develop it, you deserve to reap the rewards.