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November 28, 2011

Video: The Good Side of U.S. Economic Inequality

Topics: Political News and commentaries

A new CBO analysis supports the idea that income inequality has grown considerably over the past few decades. However, here is Paul Solman talking to libertarian law professor Richard Epstein, who argues that not only does wealth inequality act as a driving force for innovation ... but also that the created value of the products of the innovators to the economy - far out-ways the value to the innovators who created the products (i.e. Bill Gates and Steve Jobs).

"The social gain from inequality to consumers (i.e. of goods from such innovators as Gates and Jobs) probably dwarfs the entrepreneurial gain by a factor of 10 or 20 to 1."

Liberals just don't 'get it' ... but innovation comes from innovators and entrepreneurs like Gates and Jobs ... it doesn't materialize out of thin air on its own.

And as for liberal's "exploding income inequality" meme, like James Pethokoukis writes in his piece at 'the Enterpriseblog', for them ... income inequality is the new global warming:

... The reality about "exploding income inequality" and wage stagnation is far different than what Chait, the Obama White House, and Elizabeth Warren (D-Occupy Wall Street) contend. One example: Brand new research from the University of Chicago's Bruce Meyer and Notre Dame's James Sullivan finds "median income and consumption both rose by more than 50 percent in real terms between 1980 and 2009. ... Our results provide strong evidence that the well-being of the middle class and the poor has improved considerably over the past thirty years."

Those results aren't above challenge. But there certainly seems to be legitimate counter-arguments and evidence to the "exploding income inequality" meme. Indeed, differing household demographics and differing inflation measures between incomes levels means the "rise in American inequality has been exaggerated both in magnitude and timing," according to Northwestern University's Robert Gordon. That and other studies undercut a new CBO analysis showing massive income gains for the "1 percent" at the expense of everyone else. But maybe Gordon is a denier, too; another guy on the Koch-RNC payroll. Except Gordon is an Obama supporter.

America needs an informed debate on how the American middle class can prosper in the future the way it has in the past -- even if it is ideologically inconvenient for Chait and other liberals.

And we haven't even gotten to the data that shows income inequality can be explained by household demographics.

Related: Journalists investigate 'the truth' about income inequality

Posted by Hyscience at November 28, 2011 12:52 PM

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