Americans More Willing to Tolerate Economic Inequality

There is not an equality of opportunity, and certainly not an equality of results. Our plutocracy is more pronounced than ever, and very dangerous to the health of the country. I don't see that the American public is particulary sanguine with what is going on.

^9/8/06: Whining Over Discontent

By PAUL KRUGMAN

We are, finally, having a national discussion about inequality, and right-
wing commentators are in full panic mode. Statistics, most of them
irrelevant or misleading, are flying; straw men are under furious attack.
It's all very confusing -- deliberately so. So let me offer a few
clarifying
comments.

First, why are we suddenly talking so much about inequality? Not because
a few economists decided to make inequality an issue. It's the public --
not progressive pundits -- that has been telling pollsters the economy is
"only fair" or "poor," even though the overall growth rate is O.K. by
historical standards.

Political analysts tried all sorts of explanations for popular discontent
with the "Bush boom" - it's the price of gasoline; no, people are in a
bad mood because of Iraq -- before finally acknowledging that most
Americans think it's a bad economy because for them, it is. The lion's
share of the benefits from recent economic growth has gone to a small,
wealthy minority, while most Americans were worse off in 2005 than
they were in 2000.

Some conservatives whine that people didn't complain as much about
rising inequality when Bill Clinton was president. But most people were
happy with the state of the economy in the late 1990's, even though the
rich were getting much richer, because the middle class and the poor were
also making substantial progress. Now the rich are getting richer, but most
working Americans are losing ground.

Second, notice the amount of time that inequality's apologists spend
attacking a claim nobody is making: that there has been a clear long-term
decline in middle-class living standards. Yes, real median family income
has risen since the late 1970's (with the most convincing gains taking
place
during the Clinton years). But the rise was very small -- small enough that
other considerations, like increasing economic insecurity, make it unclear
whether families are better or worse off. And that's the point: the United
States as a whole has grown a lot richer over the past generation, but the
typical American family hasn't.

Third, notice the desperate effort to find some number, any number, to
support claims that increasing inequality is just a matter of a rising
payoff
to education and skill. Conservative commentators tell us about wage gains
for one-eyed bearded men with 2.5 years of college, or whatever -- and
conveniently forget to adjust for inflation. In fact, the data refute any
suggestion that education is a guarantee of income gains: once you adjust
for inflation, you find that the income of a typical household headed by a
college graduate was lower in 2005 than in 2000.

More broadly, right-wing commentators would like you to believe that the
economy's winners are a large group, like college graduates or people with
agreeable personalities. But the winners' circle is actually very small.
Even
households at the 95th percentile -- that is, households richer than 19 out
of 20 Americans -- have seen their real income rise less than 1 percent a
year since the late 1970's. But the income of the richest 1 percent has
roughly doubled, and the income of the top 0.01 percent -- people with
incomes of more than $5 million in 2004 - has risen by a factor of 5.

Finally, while we can have an interesting discussion about questions like
the role of unions in wage inequality, or the role of lax regulation in
exploding
C.E.O. pay, there is no question that the policies of the current majority
party -- a party that has held a much-needed increase in the minimum wage
hostage to large tax cuts for giant estates -- have relent-lessly
favored the
interests of a tiny, wealthy minority against everyone else.

According to new estimates by Thomas Piketty and Emmanuel Saez, the
leading experts on long-term trends in inequality, the effective federal
tax
rate on the richest 0.01 percent has fallen from about 60 percent in 1980
to about 34 percent today. Meanwhile, the U.S. government - unlike any
other government in the advanced world -- does nothing as more and more
working families find themselves unable to obtain health insurance.

The good news is that these concerns are finally breaking through into
our political discourse. I'm sure that the usual suspects will come up
with further efforts to confuse the issue. I say, bring ?'em on: we've
got the arguments, and the facts, to win this debate.

Re: Americans More Willing to Tolerate Economic Inequality


This sounds like a classic homework question.....and it looks like you've just got the answer, handed on a plate.

Well done, old boy.