In recent years, Joseph Stiglitz has focused on the issue of income inequality. And last week, he testified before the Senate Budget Committee. The topic was, Opportunity, Mobility, and Inequality in Today’s Economy. It’s all standard stuff around here, but it can’t be repeated enough. Every day I hear parts of the conservative disinformation campaign. There’s always someone like Greg Mankiw around to argue, “We really don’t have inequality; and even if we do, we have equality of opportunity; and even if we don’t, it doesn’t really matter; and even if it does, there’s nothing we can do about it; and even if there is, we shouldn’t because income inequality is good!” If such people were honest, they would just say, “We don’t care!”
Stiglitz’s paper is fairly short and if you are interested in the subject, I highly recommend reading it. But I’ll give you the rundown here. He makes eight points, but there is overlap, so I’ve whittled them down to six points:
Inequality is the result of policies. This gets back to what I was talking about this morning in, Warren Buffett Counter-Counterargument. Conservatives claim the privilege of the rich is “God given” or “natural.” It’s the old libertarian belief that capitalism is natural, as though modern capitalism is anything close to that.
The Rich are compensated according to their value to the economy. This is part of that same “natural” argument. Robert Reich wrote an excellent article countering this, The “Paid-What-You’re-Worth” Myth. But Stiglitz makes a great point, “If we look at those at the top, they are not those who have made the major innovations that have transformed our economy and society; they are not the discoverers of DNA, the laser, the transistor; not the brilliant individuals who made the discoveries without which we would not have had the modern computer.” No they aren’t! They are people who are good at “figuring out how to get a larger share of the nation’s pie, rather than enhancing the size of that pie.”
Trickle-down is a lie. Milton Friedman’s old canard that income inequality was great because everyone was doing better has been shown to be a cruel lie.
Inequality is bad for economic growth. Another conservative argument is that inequality is good for growth. Stiglitz points out that the 2008 financial crisis proved that this was a lie. But the truth is that our economic performance for the last 35 years has shown this to be true. The only reason anyone has ever taken this talking point seriously is because the rich push it.
Inequality makes us a less democratic nation. Just check out McCutcheon vs FEC where the Supreme Court Strikes Blow for Oligarchy.
Inequality is bad for the federal budget. I don’t think this is a particularly important issue. It is true. But a more important truth is that conservatives don’t care about the budget deficit. They just use it as a convenient cudgel to push for cutting social spending. If they really cared about the issue, they would call for at least some increase in taxes. They don’t so they don’t care.
It’s sad that we even have to discuss income inequality. It is yet another issue like global warming. I discussed the three stages of global warming denial in, It’s Raining, But Not for Long. At one time, income equality was an issue open to debate. But the more clear the data get, the more extreme the conservative arguments get. Yet they aren’t held accountable. The newest excuse for doing nothing is accepted as being as valid as the last one was.
We really should be talking about solutions. I started a series of articles, “Income Inequality Solutions.” But I haven’t worked on in the last couple of months. I’ll have to get back to that. Until then, here are the first two articles: