The remarks of Alan Krueger, chairman of Obama’s Council of Economic Advisers, asserting that taxing the rich can spur economic growth demonstrate that he and the Administration are nothing if not consistent in their mistakes. Krueger says that there is growing income inequality in the United States, that this growing inequality contributes to slowing economic growth, and that raising taxes on the wealthy to offset some of this growing income inequality would actually stimulate the economy in the near term. While income inequality in the United States is growing, the …
A new poll shows that, despite attempts by liberal protesters and politicians to inject class resentment into the national debate, Americans, by and large, remain unconcerned by income inequality. Gallup reports that only 2 percent of Americans list the “divide between rich and poor” as the most important economic issue facing the country. Those findings come from an open-ended survey, meaning respondents were not confined to a pre-selected group of responses. Unemployment and the national debt top the list, but all told, a full 17 economic issues rank higher in …
A new poll from Gallup suggests that President Obama’s class warfare argument and the Occupy Wall Street movement are failing to resonate with Americans — and might actually be backfiring. The new survey reveals that Americans today are less likely to think of the country as divided into “haves” and “have nots” as compared to when Obama ran for office in 2008. That campaign featured the Obama’s “spread the wealth around” rhetoric and followed former Democrat vice presidential candidate John Edwards’ talk of “two Americas.” Americans were equally divided when …
What did America’s founders say about economic inequality? Rather than unload statistics about the reality of inequality in America today, which we have done on other occasions, this post considers inequality based on the economic principles on which our republic was founded. These principles remind us why economic inequality is not necessarily an injustice, but rather a necessary component of any prosperous society. Property Rights Far from the notion of merely owning physical property, the founders understood property rights to include “natural rights.” In an essay on property rights in …
Recently, the Congressional Budget Office (CBO) released its latest statistics on income inequality. Economists, bloggers and others have been furiously debating their implications. Over at the American Enterprise Institute, Jim Pethokoukis has been bludgeoned by various left-wing bloggers for pointing out that the story of growth of income inequality is much more complicated than the simple version spun by the CBO, and that there exists a considerable amount of evidence that income inequality hasn’t gotten worse since the ‘90s. His arguments can be read here, here and here. One point …
This is part three in a debate with liberal blogger Tim Mitchell on whether income inequality is a problem. In part one I laid out why income inequality isn’t a problem. In part two I refuted arguments made by Mr. Mitchell. In this post I show why Mr. Mitchell’s arguments continue to fall short. For part one from Mr. Mitchell, click here. For part two from him, click here. For part three from him, click here. The fundamental point about income inequality remains: All income groups have made solid economic …
This is part one in a debate with liberal blogger Tim Mitchell on whether income inequality is a problem. In this post I lay out why income inequality isn’t a problem. For part one from Mr. Mitchell, click here. When it comes to income inequality, the left argues that since 1979 the top ten percent of taxpayers are making an unfairly large portion of total U.S. income. This narrative is advanced by the widely accepted work of Thomas Piketty and Emanual Saez, showing that “the top 1 percent of Americans now receive …
Listening to liberals on the campaign trail or Lou Dobbs every night, one would think that U.S. trade with china has been a disaster for Americans. Not so says a new paper by University of Chicago colleagues John Romalis and Christian Broda. The American reports: According to their research, the perceived rise in inequality—accepted as gospel by many economists and political figures—comes down to a simple measurement error, namely, focusing only on income, rather than on the prices of goods that particular groups consume. “We are underestimating the gains from …
It is an unquestioned doctrine of faith on the left that the American worker has not shared in the United States phenomenal economic growth since the late 1970s. Supporting their claims, the left often points to data like the chart below showing median household income falling far behind gains in productivity: But as Heritage scholar James Sherk documents, just looking at workers income is extremely misleading since it leaves out all the benefits firms pay workers in the form of health coverage, 401(k)s, and sick leave. Once the growth in …
In the Wall Street Journal today American University and the University of Nevada at Reno economics professor Brad Schiller offers a great corrective to those who claim inequality is growing in the United States. First Schiller notes that while the share of the pie the bottom 20% of the population is earning is smaller than it was in 1970, the pie itself is much larger. Factoring in economic and population growth, Schiller explains, “the average income of people at the bottom of the income distribution has risen 36%” since 1970. …
