Monday, April 23, 2012

More inequality nonsense

Tim Noah, author of a new book about inequality, attempts to explain why we should actually care about the issue:
Because it creates alienation. I worry less about the 99 percent (which, let’s face it, includes a lot of pretty affluent people) than about the bottom 60 or 50 percent. Income earners at the median have not shared in America’s prosperity. They’ve actually seen their incomes go down (after inflation) during the past decade, and over the past three decades their increases seem pitiful compared both with people earning top incomes (and here I mean not just the top 1 percent but the top 10 and even 20 percent) and with people at the median during the postwar era. For a long time economists said: Wait until productivity rebounds. Then working families will get their share. But when productivity rebounded like crazy in the aughts, working families saw no reward. 
What this means is that if you’re at the median you have no positive reason to care how the economy does. Your only motivation is fear—if the economy does really badly you may lose your job. But there’s no upside. 
I think this situation has a lot to do with why there’s so much suspicion of institutions that knit the country together—Congress, the media, etc. Logically the suspicion should be directed at the rich, but nobody knows what Lloyd Blankfein looks like. Everybody knows what Barack Obama and John Boehner look like. So people rage against Washington, and government, and you get both the Tea Party and Occupy Wall Street. These groups are quite different in their political orientation, but both groups express contempt for democratic processes. 
I also think that the social deterioration of the working class described in Charles Murray’s recent book Coming Apart—out-of-wedlock births, dwindling church attendance, etc.—is largely attributable to the Great Divergence. Murray perversely insists that it’s entirely cultural, but if you ignore that then his book does a pretty good job describing what happens to a society in which people lose their sense of common purpose.
A few points:
  • That income has declined or stagnated is not at all clear. Further, notice that Noah says "income" instead of "compensation," which are not the same thing.
  • Outside of Noah's disputed data regarding income, there is nothing in the way of facts or data presented here, just lots of conjecture and speculation. 
  • Fear is a pretty powerful motivator for caring how the economy does. Further, even if people do not have a positive reason to care about the economy's performance, so what? Noah does not say why this matters. In addition, let's keep in mind that the economy, for all of the raging inequality,  has hardly slipped off voters' collective radar. Indeed, it remains by far their biggest concern
  • Noah's linkage of alleged voter angst over income inequality with suspicion of the media and Congress is bizarre. Is it not possible that distrust of both stem from a perception, not exactly unfounded, that neither is doing a very good job? Does Noah think Congress is doing a good job?  If so, why? And by what logic are the rich most deserving of blame? Are physicians the reason that Congress can't pass a budget?
  • Noah ascribes developments such as illegitimacy and declining church attendance to income inequality, but declines to explain the connection other than to say people have lost a "sense of common purpose." Why does someone need a sense of common purpose to avoid making bad decisions? What is the logic here? Where is the evidence?
Noah's comments further underscore the utter inability of those who decry inequality to make a cogent argument as to why anyone should care. We are presented with little in the way of either facts of evidence, but rather a bunch of unsupported logical leaps and fuzzy reasoning. And this is supposed to be the great issue of our day?

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