Thursday, July 12, 2007

The New Myths About Inequality

The Left is gearing up for 2008 with major proposals for government intervention to "fix" the distribution of income. For example, the Center for American Progress, a liberal think tank, recently proposed raising the minimum wage, giving unions more advantages in the workplace, expanding government's role in child care, and other policies that will be harmful to economic growth, which is the one proven way to raise our standard of living.

In order to build support for this statist agenda, policy wonks and pundits are spreading a set of myths about inequality. We are hearing that incomes are stagnating in middle America, that class mobility is disappearing, and that the political process favors the wealthy. But we should not believe the myths.....

Fifty years ago, many of America's mid-range workers toiled on assembly lines. Today, more of them work in service industries. How does the standard of living of today's mid-range workers compare to that of their counterparts in America thirty years ago or their counterparts in other advanced nations today? Here are some generalizations:

--In terms of food, clothing, shelter, and durable goods, mid-range workers are doing rather well. Their living spaces are notably larger. They almost all have air conditioning and central heating, while some of their foreign counterparts do not. They have plenty of television sets, telephones, and household appliances.

--In health care, they consume more premium medicine (services provided by specialists and advanced equipment). They are more likely to overcome cancer, heart disease, depression, or an at-risk pregnancy; however, much of their additional health care spending produces benefits that are at best difficult to measure and at worst nonexistent. And a relatively large share of their compensation consists of employer-provided health benefits, even though they might instead prefer more take-home pay.

--Today's mid-range worker probably has a more difficult time affording a home in a highly-desirable location. Those with a taste for urban amenities, beaches, or spectacular mountain scenery are likely to be priced out of the market. The supply of amenity-rich locations has not kept up with demand, and affluent Americans have bid up the cost of living along the ocean in San Diego or near the ski slopes of Aspen or in the classy sections of San Francisco.

--Speaking of classy locations, do not expect the mid-range worker's children to go to the schools favored by the affluent. Private school tuition has gone up faster than the mid-range worker's income, as has the cost of housing in the neighborhoods with deluxe public schools. College choice, too, will be very constrained by the determination of the affluent to bid up the price of the prestige spots.

The distribution of rewards in America today is still relatively merit-based. However, the extent of economic and social mobility is difficult to assess. One optimistic indicator of mobility is that wealth differences across siblings remain fairly high. Another optimistic indicator is that educational attainment continues to rise with each generation, particularly among immigrants. On the pessimistic side, the trend toward smaller families tends to reduce sibling variation, and my guess is that it reduces the deviation of children's social standing relative to their parents....

The share of government in our economy moves steadily upward. The fastest-growing sector of our economy, health care, is headed for government domination, either with health care "reform" or without it, due to the demographics of Medicare. Many politicians campaign as if they believe that concentration of political power is a good thing-as long as they have the power. Populists promise to use that power to fight against the wealthy and the privileged.

In reality, major corporations and entrenched interests are systemically favored by greater concentration of political power. Unregulated competition, not big government, is the friend of the little guy. Political leaders who campaign on the issue of economic inequality are almost certain to tighten the relationship between political and economic power.

More here

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ELSEWHERE

Deliberate BBC deception: Taranto has the story. An attempt to portray Muslims in a good light by concealing half the facts. Perhaps the Beeb should be renamed "The Lebanese Broadcasting Corporation".

Disgusting Army brass again: "Erik Botta believes he's done right by his country. Days after 9/11, as a young Army reservist, he volunteered to go to war. He was soon in Afghanistan. The next year, he was sent out again, this time to Iraq, part of a Special Operations team. In the next two years, he was sent to Iraq again. And again. He thought he was done. But now, the Army wants Sgt. Botta one more time. The 26-year-old Port St. Lucie man has been ordered to report to Fort Jackson, S.C., on July 15 for his fifth deployment. And that has compelled Botta, a first-generation American who counts himself a quiet patriot, to do something he never thought he'd do: sue the Army. "I'm proud of my service," he said. "I never wanted it to end like this." Nearly seven years into his eight-year commitment to the reserves, the personal costs are higher for Botta. He could lose his home. His job at Sikorsky, working on the Black Hawk military helicopter, could be on the line. He's halfway to his electrical engineering degree, planning a career in defense work, but his professors say he'll suffer a significant setback if he is deployed. He doesn't mention the danger another deployment would bring, but his wife and parents do."

The two Americas: "Could Democratic presidential candidate John Edwards actually be right about something? Not where to go to get a haircut, mind you, I mean about there being two Americas. There is the vibrant America ... and the stagnant one. There is the America of ever-increasing wealth, innovation, creativity, of a dynamic economy, new jobs, new products and services. Choices galore. And there is the politician's America: The regulated America, the subsidized America, the earmarked America. The failing America."

Spirit of independence: "Control-freak politicians in the states that outlaw fireworks (among other things) are fond of telling us how they're saving us from ourselves by building a legislative wall between us and our pyrotechnic fun. Severed fingers, scorched shrubbery and ruptured eardrums, they never tire of lecturing us, are the inevitable wages of allowing us to make our own decisions. It's better that we get tackled and dragged away by the always exuberant forces of law and order than risk setting fire to the neighbor's petunias. Well, they're (sort of) right -- some segment of the population will, inevitably, get injured by fireworks, just as people suffer from the misuse of chainsaws, candles and random pointy objects lying around the kitchen. But it's not the responsibility of politicians to save us from ourselves or to bundle the world in bubble-wrap to protect us from every possible risk. Lord knows, if we need protection from anything, it's busybody politicians and their pet enforcers."

For more postings from me, see TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH, POLITICAL CORRECTNESS WATCH, GUN WATCH, SOCIALIZED MEDICINE, FOOD & HEALTH SKEPTIC, AUSTRALIAN POLITICS, IMMIGRATION WATCH INTERNATIONAL and EYE ON BRITAIN.

List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here or here or here

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"Why should the German be interested in the liberation of the Jew, if the Jew is not interested in the liberation of the German?... We recognize in Judaism, therefore, a general anti-social element of the present time... In the final analysis, the emancipation of the Jews is the emancipation of mankind from Judaism.... Indeed, in North America, the practical domination of Judaism over the Christian world has achieved as its unambiguous and normal expression that the preaching of the Gospel itself and the Christian ministry have become articles of trade... Money is the jealous god of Israel, in face of which no other god may exist". Who said that? Hitler? No. It was Karl Marx. See also here and here and here.

The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialistisch) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party".

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1 comment:

eric said...

How can someone be so audacious as to accuse the BBC of left wing bias? Next thing you know, your blog will have the nerve to accuse water of being wet and the Earth of being round.

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and vote for me for best political blog and best overall blog as well, IF AND ONLY IF you feel my blog is of a high quality. I really think I have a legitimate shot at winning. If you are open to spreading the word, that would be cool as well.

Thank you.

eric aka www.blacktygrrrr.wordpress.com

P.S. If you are open to doing a link exchange, I get some pretty decent traffic.