Our Banana Republic(nytimes.com)
nytimes.com
Our Banana Republic
http://www.nytimes.com/2010/11/07/opinion/07kristof.html
5 comments
You might take another look at the second half of the article, as it directly addresses the "perceived...tradeoff between equity and economic growth", and why income inequality is relevant.
I personally wouldn't go to an op-ed column for analysis on this kind of issue, but Kristof certainly addressed the matter.
I personally wouldn't go to an op-ed column for analysis on this kind of issue, but Kristof certainly addressed the matter.
No, he makes the claim that "inequality we’ve now reached may actually suppress growth" and as evidence he cites a study that shows areas with inequality have more bankruptcies.
What does the rate of bankruptcies have to do with growth? I would expect MORE bankruptcies in a place that has high growth.
What does the rate of bankruptcies have to do with growth? I would expect MORE bankruptcies in a place that has high growth.
I think that when most people talk about income inequality, they're not actually trying to get at either of those things directly.
I think the implication is that if we could somehow take the labor that went into the wealth of the top X% and redirect that labor toward things that benefit the bottom 100-X%, everyone would be happier in aggregate. Whether or not that's true or possible isn't clear, but it seems intuitively reasonable.
I think the implication is that if we could somehow take the labor that went into the wealth of the top X% and redirect that labor toward things that benefit the bottom 100-X%, everyone would be happier in aggregate. Whether or not that's true or possible isn't clear, but it seems intuitively reasonable.
It indeed sounds very reasonable but is hard to put into practice: http://en.wikipedia.org/wiki/Communism
Cute. If you look at the actual numbers, income distribution in the US looks a lot more like China than the EU, for example: http://en.wikipedia.org/wiki/List_of_countries_by_income_equ...
That's clearly not the whole picture, but it's a bit more interesting than automatically associating income equality with communism.
That's clearly not the whole picture, but it's a bit more interesting than automatically associating income equality with communism.
It is mostly accepted among economists that poor people are better off today than they were in the 1970s.
I'm not going to task with providing a source for that (mostly because you aren't defining what you mean by "poor.") But I'll submit that it's far more widely acknowledged that things have deteriorated very substantially for the middle class in U.S., by nearly every measure, since the 60s-70s. To the extent that some people seriously question whether the U.S. even has a "middle class", by this point.
But as for the poorest, I think that direct observation of (1) inflation-adjusted decline in wages (especially the minimum wage) since 1974, (2) dramatically increased health care, insurance, and higher education costs, (3) rising real estate costs (and the foreclosure morass), (4) permanent outsourcing & again, dramatically increased competition with the migrant (illegal) labor pool would tend to weaken your claim that things have gotten better for those in lower-skilled / lower-earning brackets.
On the other hand, it's possible there are rich people that acquired their wealth through underhanded means.
The article is not claiming that the richest get that way through underhanded means. And even if (on an individual level) the increasing accumulation of the wealth (among the wealthiest) was entirely above board, that doesn't mean this isn't a long-term problem for the welfare of society as a whole -- including, by direct implication, the long-term welfare and financial security of the richest.
... because the welfare of the poor and rich are separate issues. They are not linked in any simple-minded fashion.
No, but they're linked in a nuance, complex, systemic fashion, whether you like it or not. "We're all in this together", is the basic point.
In summary, I think the recent fad of discussing "income inequality" ...
It's not a fad. It's a very basic, fundamental question about the long-term survival prospects of our society as whole -- including the wealthy and not-so wealthy.
I'm not going to task with providing a source for that (mostly because you aren't defining what you mean by "poor.") But I'll submit that it's far more widely acknowledged that things have deteriorated very substantially for the middle class in U.S., by nearly every measure, since the 60s-70s. To the extent that some people seriously question whether the U.S. even has a "middle class", by this point.
But as for the poorest, I think that direct observation of (1) inflation-adjusted decline in wages (especially the minimum wage) since 1974, (2) dramatically increased health care, insurance, and higher education costs, (3) rising real estate costs (and the foreclosure morass), (4) permanent outsourcing & again, dramatically increased competition with the migrant (illegal) labor pool would tend to weaken your claim that things have gotten better for those in lower-skilled / lower-earning brackets.
On the other hand, it's possible there are rich people that acquired their wealth through underhanded means.
The article is not claiming that the richest get that way through underhanded means. And even if (on an individual level) the increasing accumulation of the wealth (among the wealthiest) was entirely above board, that doesn't mean this isn't a long-term problem for the welfare of society as a whole -- including, by direct implication, the long-term welfare and financial security of the richest.
... because the welfare of the poor and rich are separate issues. They are not linked in any simple-minded fashion.
No, but they're linked in a nuance, complex, systemic fashion, whether you like it or not. "We're all in this together", is the basic point.
In summary, I think the recent fad of discussing "income inequality" ...
It's not a fad. It's a very basic, fundamental question about the long-term survival prospects of our society as whole -- including the wealthy and not-so wealthy.
It would be useful to take "wealth" into account as well. One can have a big income and quite small wealth and vice versa.
The "income inequality" is irrelevant only if we assume that the income is not related to the resources. This assumption I find rather weak.
The "income inequality" is irrelevant only if we assume that the income is not related to the resources. This assumption I find rather weak.
Agreed, no relation between the two. The poor have a chance to make it, work hard and be successful, especially in America.
Most don't have it so bad either with flat screen TVs, Internet, food to eat and a roof over their heads.
Most don't have it so bad either with flat screen TVs, Internet, food to eat and a roof over their heads.
What's seems more important to me is not the degree of inwquality, but whether that inequality represents a poor distribution of resources, for example it seems ok to me that people like Larry and Sergei, or Bill Gates, are mega-rich, because they got that way by providing world-changing value to society.
If the bulk of the inequality is spoken for by people like these, then I don't see a problem.
If on the other hand most of the inequality comes from financial manipulation that isn't also productive to society, then we have a serious problem as the incentives are skewed towards gaming the system rather than trying to produce value.
According the the Bureau of economic analysis, finance accounts for 24% of US GDP from private industry and captures 39% of the profits.
What value is this providing? Learning how to create new derivatives or HFT algorithms to compete against other people doing the same thing doesn't seem to create shared prosperity in the way that curing a disease, creating Google, or making electric cars does.
If the bulk of the inequality is spoken for by people like these, then I don't see a problem.
If on the other hand most of the inequality comes from financial manipulation that isn't also productive to society, then we have a serious problem as the incentives are skewed towards gaming the system rather than trying to produce value.
According the the Bureau of economic analysis, finance accounts for 24% of US GDP from private industry and captures 39% of the profits.
What value is this providing? Learning how to create new derivatives or HFT algorithms to compete against other people doing the same thing doesn't seem to create shared prosperity in the way that curing a disease, creating Google, or making electric cars does.
(Dummy) Democracy and (Crony) Capitalism within the context of Global Economy is not suitable and scalable. Hope somebody finds a comprehensive solution.
Not a terrible article as far as this political junk goes, but really has no place on HN. This is reddit/r/politics fodder.
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It is irrelevant if there is "income inequality". The rational question to ask is "what is the quality of life of low income workers?" Who cares if some wealthy person is making a lot of money.. Why begrudge them their wealth? Where is the logic in that?
It is mostly accepted among economists that poor people are better off today than they were in the 1970s. Do you believe these economists are wrong? Good: That is an argument I'm happy to have with you- It is a relevant and rational argument. I suspect the economists are right, but I'm not 100% sure on this, either.
On the other hand, it's possible there are rich people that acquired their wealth through underhanded means. Again, if you think this is the case I'm happy to have a discussion on that topic. I think there are many cases where this has proven to be true. However, it isn't relevant in a discussion on the situation faced by low income people, because the welfare of the poor and rich are separate issues. They are not linked in any simple-minded fashion.
In summary, I think the recent fad of discussing "income inequality" is a shell game that mixes together several unrelated issues and clouds attempts at rational conversation. It is a tool people use to make dishonest ideological arguments.