By Charles Lane, Published: December 19 Statistics show rising income inequality in the United States. But, contrary to the impression created by the Occupy protests, and media coverage thereof, statistics also show that Americans worry less about inequality than they used to. In a Dec. 16 Gallup poll, 52 percent of Americans called the rich-poor gap âan acceptable part of our economic system.â Only 45 percent said it âneeds to be fixed.â This is the precise opposite of what Gallup found in 1998, the last time it asked the question, when 52 percent wanted to âfixâ inequality. Okun saw free markets as a source of unparalleled human progress â and of big gaps between rich and poor. Indeed, he argued, markets are efficient partly because they distribute economic rewards unevenly. Government should try to smooth out income stratification, but such efforts risk undermining incentives to work and invest. Hence the âbig trade-offâ: channeling income from rich to poor, Okun wrote, was like trying to carry water in a leaky bucket. He wanted to move money from rich to poor without âleakingâ so much economic growth that the whole process became self-defeating. [Snip] Public-sector unions and other interest groups wrap their causes in the rhetoric of equality. Often, what theyâre really protecting are privileges that raise the cost of public services to everyone else â including citizens who earn a lot less than civil servants. Yes, Wall Streetâs bonuses are stratospheric. But the New York Times recently reported that Medicaid was paying nine executives $500,000 or more per year to operate nonprofit homes for the mentally disabled. http://www.washingtonpost.com/opini...lity/2011/12/19/gIQAeVmR5O_story.html?hpid=z4
Obama is using reprehensible demagoguery and highly divisive class warfare rhetoric. He sounds more like Hugo Chavez than the President of the United States. That said, there is a problem with the income statistics. Two problems actually. The big banks and Wall Street comp packages are not the result of free enterprise. If we are to believe what we were told during the bailout, they would all be out of jobs if the taxpayers hadn't bailed them out. It is naive for them toi think that voters wouldn't be pissed to see them going on as if nothing had happened. Most of the blame belongs to the politicians, who could have attached onerous conditions to the bailouts but didn't. I don't give the titans of Wall Street a pass though, just because they had good lobbyists. The second problem with growing income inequality is the enormous comp packages that CEOs routinely receive. I have to think these gargantuan multihundred million dollar bonuses, retirement packages, golden handshakes, etc have skewed the income statistics. Again, people have a right to be pissed. Shareholders are pissed, but the system has been so rigged that there appears little they can do about it. Ordinary citizens, facing financial hardships most never dreamt possible, are understandably angry as well. This is basically a symptom of a total breakdown of corporate governance. It could be fixed easily by legislation or by the SEC, but won't be. Ironically, the republicans have managed to get themselves labelled as responsible for both these outrages, while the Obama and the democrats rake in huge contributions from Wall Street and CEOs, in addition to their paymasters at the unions and Hollywood. Somehow I don't see either Romney or Gingrich as the person to sort this out.
Ditto. Ditto. "Income equality" is a Socialist ideology... has no place in "America, land of opportunity... land of the free". Everyone should have the OPPORTUNITY to rise as high as they are motivated to work and are capable.. opportunity meaning, "not having the government on your back impeding your efforts".
Sure it's egregious, but isn't that a capitalistic prerogative and up to the company board to determine? It's the shareholders who should be carping... too much of the company profit goes to top management or something like that.
It is the fault of the boards but something is obviously broken. But what do I know. I think NFL and NBA players should be paid minimum wage.
The OWS crowd is disingenuous when all in the same breath they cry, "CEO pay is outrageous", "banker bailouts with taxpayer funds are wrong", and "my healthcare should be free... my college education should be free....having to pay my own tuition or repay my student loans is unfair".
Opportunity should be measurable. Here's one way of looking at it: http://www.oecd.org/dataoecd/2/7/45002641.pdf