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Eamon Arasbard

Income inequality "key issue" for 2016

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http://www.latimes.com/nation/la-na-campaign-income-20150205-story.html#page=1

 

 

Although economic growth has resumed, the stock market has soared into record territory, and the number of Americans filing new claims for unemployment benefits has fallen to its lowest level in nearly 15 years, income has remained stuck except for those at the very top.

 

According to the article, Democrats want to solve this inequality by imposing a tax on inheritances to give everyone else "wage supplements." It sounds like Republicans are advocating more reasonable policies, but are not directly challenging the premise that income inequality is bad.

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http://www.latimes.com/nation/la-na-campaign-income-20150205-story.html#page=1

 

 

According to the article, Democrats want to solve this inequality by imposing a tax on inheritances to give everyone else "wage supplements." It sounds like Republicans are advocating more reasonable policies, but are not directly challenging the premise that income inequality is bad.

In a voting democracy, openly challenging the premise that income inequality is bad will lose you the election.

 

What you would need to do is openly challenge the believed reality of democrats that income inequality is growing.

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In a voting democracy, openly challenging the premise that income inequality is bad will lose you the election.

 

What you would need to do is openly challenge the believed reality of democrats that income inequality is growing.

 

The premise is that income inequality is wrong.  The size and/or growth of the gap is irrelevant.  The actual level of prosperity enjoyed by the bottom economic class is irrelevant.  The actual cause of poverty on the one hand and of wealth on the other is irrelevant.  Only the gap matters.  What has to be challenged is that premise.  How do you do it in the context of a campaign for election to high office if you know that the consensus accepts the premise?

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The premise is that income inequality is wrong.  The size and/or growth of the gap is irrelevant.  The actual level of prosperity enjoyed by the bottom economic class is irrelevant.  The actual cause of poverty on the one hand and of wealth on the other is irrelevant.  Only the gap matters.  What has to be challenged is that premise.  How do you do it in the context of a campaign for election to high office if you know that the consensus accepts the premise?

My point was that upon the stated terms that you set (premised), you cannot; you would definitely lose.

 

What you'd have to do is employ some sort of justification that says, "Although inequality is prima facie wrong, the less are still better off with inequality than without. That's because the only means of redressing inequality is through wealth transfer by taxing wealth. This would destroy both the incentive and the moneys needed for investment of the class that creates jobs and wealth --the capitalists."

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My point was that upon the stated terms that you set (premised), you cannot; you would definitely lose.

 

What you'd have to do is employ some sort of justification that says, "Although inequality is prima facie wrong, the less are still better off with inequality than without. That's because the only means of redressing inequality is through wealth transfer by taxing wealth. This would destroy both the incentive and the moneys needed for investment of the class that creates jobs and wealth --the capitalists."

 

Would that convince the average voter?

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If you acknowledged the legitimate grievances which are related to wealth inequality -- namely, the Federal Reserve inflating the money supply to give money to politically connected bankers -- you'd at least have a chance. Ron Paul did that in 2012, and I think he probably would have won if the Republicans had picked him.

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If you acknowledged the legitimate grievances which are related to wealth inequality -- namely, the Federal Reserve inflating the money supply to give money to politically connected bankers -- you'd at least have a chance. Ron Paul did that in 2012, and I think he probably would have won if the Republicans had picked him.

 

You need a majority of the independents in a major election.  Even then, there are no guarantees of a victory.  Ask Romney.  Ron Paul is perceived as a fringe candidate and independents seem to steer clear of such candidates so Paul would have suffered the fate of a Goldwater or McGovern.  Unless you know something that I don't.  

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I collected a few articles on why wealth/income inequality is a good thing:

 

http://georgereismansblog.blogspot.com/2014/01/the-very-deserving-super-rich.html

http://alibertarianperspective.wordpress.com/tag/income-inequality/

http://mises.org/efandi/ch9.asp

http://www.youtube.com/watch?v=7pq79lYauZo

http://object.cato.org/sites/cato.org/files/pubs/pdf/pa640.pdf

http://www.americanthinker.com/2011/09/inequality_its_a_good_thing.html

http://www.nationalreview.com/articles/229100/fallacy-fairness/thomas-sowell

http://www.cato-unbound.org/2013/03/21/tom-g-palmer/some-thoughts-inequality-wealth-moral-claims-we-may-make-each-other

http://investorjunkie.com/26637/wealth-inequality-america/

http://lubbockonline.com/editorial-columnists/2014-01-20/williams-wealth-redistribution-bad-solution-income-inequality#.UuM5lBAo670

http://www.forbes.com/sites/johntamny/2013/03/03/the-life-enhancing-unrelenting-brilliance-of-income-inequality/

http://www.policymic.com/articles/12319/6-myths-about-income-inequality-in-america

http://www.nydailynews.com/opinion/happy-tale-cities-article-1.1483174?pgno=3

http://paulgraham.com/inequality.html

http://www.american.com/archive/2007/may-june-magazine-contents/the-upside-of-income-inequality

http://www.businessweek.com/stories/2007-07-08/an-upside-to-inequality

http://newasiarepublic.com/?p=28740

http://www.redstate.com/imperfectamerica/2012/05/29/three-cheers-for-wealth-inequality/

http://www.reddit.com/r/Objectivism/comments/1vzolu/joshua_job_explains_why_wealth_inequality_is_a/

http://qz.com/96836/inequality-can-be-a-good-thing/

http://www.examiner.com/article/income-inequality-is-a-good-thing

http://blog.heritage.org/2011/11/15/income-inequality-and-the-founding-fathers/

http://www.nextgenjournal.com/2012/01/extreme-economic-inequality-is-good/

http://www.stlouisfed.org/publications/re/articles/?id=986

http://www.oregonbusiness.com/contributed-blogs/11474-income-gap

http://www.youtube.com/watch?v=OzfDxWYlCkQ

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Income inequality is norm in any social order; convincing the voters that it is desirable is the challenge. One singular political personality, or even a struggling movement, cannot over come the perceptions of populist rhetoric and popular culture.

 

Before the average voter will be persuaded to vote for a candidate of capitalist ideology, capitalism must be transformed from a pejorative term and into a virtuous term, a characteristic of proper and normal human behavior. Until our cultural leadership advances capitalism as an ideal, the general public will associate the "One Percent" with crooks. "Income Inequality" will carry the same connotation as the "malefactors of great wealth", "Robber Barons", and other derogatory terms used to fuel egalitarianism in past and present-day political leadership. The cultural perception must precede the political change.

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Income inequality regularly shows up in polls (Here's one.  Here's another.) as one of the issues least important to voters, down there with global warming.  Anyone but a Democrat should be praying that the Democrats play it up in the next election.

Fox polling doesn't count because of its horrid sampling techniques.

 

Gallup, of course, does. As far as interpretation, however, the key word is 'somewhat'. Dems will try to build upon this somewhat-ness to make the issue more urgent...

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Income inequality is norm in any social order; convincing the voters that it is desirable is the challenge. One singular political personality, or even a struggling movement, cannot over come the perceptions of populist rhetoric and popular culture.

 

Before the average voter will be persuaded to vote for a candidate of capitalist ideology, capitalism must be transformed from a pejorative term and into a virtuous term, a characteristic of proper and normal human behavior. Until our cultural leadership advances capitalism as an ideal, the general public will associate the "One Percent" with crooks. "Income Inequality" will carry the same connotation as the "malefactors of great wealth", "Robber Barons", and other derogatory terms used to fuel egalitarianism in past and present-day political leadership. The cultural perception must precede the political change.

The growth of inequality is not a norm, however, and is neither  assumed nor expected. This is because the growth of inequality is so closely linked to a shrinking of opportunity. 

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The growth of inequality is not a norm, however, and is neither  assumed nor expected. This is because the growth of inequality is so closely linked to a shrinking of opportunity. 

Assumptions and "closely linked" disparities of results are concepts widely held, popular, and vague. They are the fodder of political opportunists who play on people's emotions.

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Assumptions and "closely linked" disparities of results are concepts widely held, popular, and vague. They are the fodder of political opportunists who play on people's emotions.

'Opportunity' is measured as 'mobility', while measured income disparities normally take the form of % of wealth per segmented fifths or tenths of the population. These are not concepts; rather, empirical entities.

 

Observing and measuring mobility and increased inequality, to say that they are causally linked is not astonishing.

 

In this sense, you have opportunists of all stripes. Those who insist (against the evidence!) that inequality is not rising are opportunistically playing on emotions. too--as most people are inclined to believe the national ideology of 'opportunity'. 

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What concerns you more, inequality of opportunity, or inequality of results?

 

There will always be inequality of both. I am not even going to debate whether there is a "growing gap." I am only saying it hardly matters, as long as people are accepting the compensation of wages and benefits in return for their goods or services.

 

What concerns me are the individuals who believe government action is the best way to "correct" the inequality of economic results.

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What concerns you more, inequality of opportunity, or inequality of results?

 

There will always be inequality of both. I am not even going to debate whether there is a "growing gap." I am only saying it hardly matters, as long as people are accepting the compensation of wages and benefits in return for their goods or services.

 

What concerns me are the individuals who believe government action is the best way to "correct" the inequality of economic results.

Political power authorizes the creation of markets under the working assumption that markets function to produce the desired outcomes as  stated by the government. When they don't the marketing privileges are taken away.

 

For example, The Nobel laureate Kuznets, speaking in terms of 'labor economics', wrote that the increased modernization of capitalism will naturally drive up the value of labor. Therefore, workers benefit by the market apparatus which sees their incomes increase. A corollary to this, as stated by Kuznets, was that inequality would decrease by virtue of the raising of the level of wages.

 

This, historically, is why European-style social democracy failed to take hold in America after WW2. Although stated goals were the same, our policies were oriented towards permitting markets to produce the optimal results: again, higher wages and decreased inequality.

 

The opposite seems to have happened, with falling wages and commensurately growing inequality. 

 

Paradoxically, we seem to have encountered a sort of policy flip concerning finance and banking, with European 'austerity' basically signifying a recovery based upon 'natural' markets and business cycles, bolstered by a little dust form the confidence fairy. OTH, Americans, practicing Classical Keynesian intervention, is in far better shape.

 

In sum, sticking up on principle for a  market-value- only policy of wages and incomes that has clearly failed does nothing more than make Marx look like a genius: workers simply take over the means of production and determine fair wages based upon their own standards. 

 

The real middle ground is establishing a way of control of markets so that it might produce the best results. Or as another economist wrote, "Markets are the sail, while government is the rudder."

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That's funny AndieH. I had to laugh at almost every word you wrote. Let's just look at the phrase, "Political power authorizes the creation of markets...." What is this "Political Power" that you speak of? It seems that you use the phrase as a disembodied motive force capable of acts of creation. By an impersonal will, Political Power desires and creates markets. Somehow, this Political Power desires income equality, and while in possession of the power to control markets, will not use that power to further its own privileges but will instead implement policies that strive toward income equality. Ha, Ha Ha Ha. It's never happened in the course of history, even by those possessing the greatest economic planning apparatuses.

 

In terms of a metaphor for the role that governments play in markets, perhaps you might appreciate this: Businesses are the race cars that run on 104 octane fuel and government is the mobster choosing who gets the racing fuel and who gets stuck with 87 octane fuel in order to maximize the bookies rake.

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That's funny AndieH. I had to laugh at almost every word you wrote. Let's just look at the phrase, "Political power authorizes the creation of markets...." What is this "Political Power" that you speak of? It seems that you use the phrase as a disembodied motive force capable of acts of creation. By an impersonal will, Political Power desires and creates markets. Somehow, this Political Power desires income equality, and while in possession of the power to control markets, will not use that power to further its own privileges but will instead implement policies that strive toward income equality. Ha, Ha Ha Ha. It's never happened in the course of history, even by those possessing the greatest economic planning apparatuses.

 

In terms of a metaphor for the role that governments play in markets, perhaps you might appreciate this: Businesses are the race cars that run on 104 octane fuel and government is the mobster choosing who gets the racing fuel and who gets stuck with 87 octane fuel in order to maximize the bookies rake.

The Spanish expression goes, "Even dwarfs were once children". And metaphors are still expected to contain truth, yet many don't.

 

For example, your rather childish one is demonstratively false because North and Western European mobsters, acting under the guise of Social Democracy, did manage by their policies to abolish poverty and lessen inequality by depriving the racers much of their high-octane gasoline. It was re-distributed to the poor in the form of heating oil for the winter--far beneath market value, of course.

 

Both having markets and deciding what's marketable are political choices. Making laws that govern markets is called 'manifesting political power' because that's what making laws mean.

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So basically you exchanged one state of fascism for another.  I'm not sure I'd call that a win.  Obviously one special interest group was winning at the expense of another before, and the same state happened after, but that is simply a case of exchanging the special interests group getting privileges at the expense of everyone else.  

 

In other news:

 

State power = Force

Two people exchanging goods and services voluntarily = Market

 

Saying State Power (Force) = Market (Voluntary Exchange) is a new one to me.  

 

I'd be more interested in what such a proposition is trying to justify.  

Edited by Spiral Architect

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Andie Holland,

 It seems you have quite a lot to say about income inequality, but so far, it's not very clear as to what the point of your argument is, other than, income inequality bothers some people and interferes with their opportunities. As you've suggested in post #20, social democracies of Europe, for all of their effort to close income disparities, has created a generally poor performing economy, with plenty of poverty at the bottom. That is, I think that's what you're saying. It's a little hard to tell.

 

But, honestly, let's look at what you wrote in post #18:

 

Political power authorizes the creation of markets under the working assumption that markets function to produce the desired outcomes as  stated by the government. When they don't the marketing privileges are taken away.

1. Does political power authorize black-market industries? I suppose you could argue that Al Capone bought permission to sell alcoholic beverages in Chicago as a special franchisee, but the market for booze existed, with or without Big Al. The government did not "authorize the creation of that market"? Regardless as to whether speakeasies and bootlegging had the "desired outcome as stated by the government," the only way to break up the monopoly of the Chicago Outfit was to open the market, by repealing the Prohibition Laws, not by taking away anyone's marketing privileges.

My point is that your assumption that "political power authorizes the creation of markets" earned you the snarkish response from alpha_1. But wait, there's more...

 

 

For example, The Nobel laureate Kuznets, speaking in terms of 'labor economics', wrote that the increased modernization of capitalism will naturally drive up the value of labor. Therefore, workers benefit by the market apparatus which sees their incomes increase. A corollary to this, as stated by Kuznets, was that inequality would decrease by virtue of the raising of the level of wages.

 

2. Anyone who writes enough published articles on economics can win a Nobel prize. So, who cares who for Kuznets' opinion? If you want to establish an "empirical entity," site some statistics and sources rather than overly-abbreviated theories. And then, you would be taken more seriously if you referred to them as "statistics."

 


Paradoxically, we seem to have encountered a sort of policy flip concerning finance and banking, with European 'austerity' basically signifying a recovery based upon 'natural' markets and business cycles, bolstered by a little dust form the confidence fairy. OTH, Americans, practicing Classical Keynesian intervention, is in far better shape.

 

3. Huh?

 


In sum, sticking up on principle for a  market-value- only policy of wages and incomes that has clearly failed does nothing more than make Marx look like a genius: workers simply take over the means of production and determine fair wages based upon their own standards. 

 

4. If by this statement, you're trying to say that capitalism, or free-market principles, has failed in comparison to Marxism, you're going to have to publish for than a few articles, siting sources, before any rational person accepts your argument.

 

 

I won't bother with commenting on your metaphors; I believe all's fair when discussing economics. But really, do you have to re-post the entire preceding articles, when they bare so little relation to your comments?

 

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As for income inequality, it is simply a non-issue.  If I get a promotion it does not reach out through the ether and hurt my fellow man and if I get a pay cut he is certainly not better off.  I  Income inequality is simply the old collectivist metaphor of everyone trying to share the same pie when of course the real purpose of life is to make your own pie so you can choose the flavor that suit you (purpose,happiness, etc.)

 

Freedom = Equality before the law

Tyranny = Equality after the law

 

The former allows you to bake your own pie while the later smashes everyone into the same pie tin.  

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As for income inequality, it is simply a non-issue.  If I get a promotion it does not reach out through the ether and hurt my fellow man and if I get a pay cut he is certainly not better off.  I  Income inequality is simply the old collectivist metaphor of everyone trying to share the same pie when of course the real purpose of life is to make your own pie so you can choose the flavor that suit you (purpose,happiness, etc.)

 

Freedom = Equality before the law

Tyranny = Equality after the law

 

The former allows you to bake your own pie while the later smashes everyone into the same pie tin.  

Hume wrote that the biggest confusion in philosophy was that of mixing Is/ought statements together.

 

In other words, what you're saying is that although inequality ought not be an issue, it clearly is.

 

Fair enough, but, per Hume, we should have two entirely separate discussions...

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So basically you exchanged one state of fascism for another.  I'm not sure I'd call that a win.  Obviously one special interest group was winning at the expense of another before, and the same state happened after, but that is simply a case of exchanging the special interests group getting privileges at the expense of everyone else.  

 

In other news:

 

State power = Force

Two people exchanging goods and services voluntarily = Market

 

Saying State Power (Force) = Market (Voluntary Exchange) is a new one to me.  

 

I'd be more interested in what such a proposition is trying to justify.  

In the common lexicon, 'fascism' means a 'denial of democracy by force'. Now this doesn't say that the democratic process assures fairness, but rather the means of redress are embedded within the democratic process.

 

To say that all markets, everywhere and at all times function with government permission, sanction, control, and oversight is a statement of fact that needs no 'justification'. It is what it is.

 

Otherwise, state power = the monopoly of potential force. Again, a statement of fact.

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