Godwin-ing the income inequality debate

posted at 10:07 pm on October 27, 2011 by Karl

Given the internet, I’m not surprised James Pethokoukis beat me to this by a couple of hours, as I intend to rely on his prior work a bit:

Liberals think there are lots of ideas that intelligent Americans just aren’t supposed to challenge. If they do, they’ll be labeled “deniers,” intentionally raising a nasty comparison to Holocaust rejectionists. It’s politics at its absolute lowest.

Among the unchallengeable dogmata: the Obama stimulus created millions of jobs, Obamacare will save trillions of dollars, Dodd-Frank prevents future bank bailouts, policy uncertainty isn’t an issue hampering the recovery. And, of course, global warming poses an existential threat to civilization and humanity. Make that an “undeniable” threat.

You can now add “income inequality” to the list, thanks to New York magazine’s Jonathan Chait. In a column headlined “The Ideological Fantasies of Inequality Deniers,” Chait writes: “Rising income inequality, like climate change, is an ideologically inconvenient issue for conservatives. … The underlying facts, like the facts of climate change, are stark. Over the last few decades, income growth for most Americans has slowed to a crawl, while income for the very rich has exploded.”

Chait’s attack targets Rep. Raul Ryan for a speech he gave at the Heritage Foundation. Thunders Chait: “Don’t confuse Paul Ryan with the facts. If studies run up against Ryan’s ideology, then the studies must give way.” Chait’s argument has a couple of teeny-weeny flaws.

First, none of Chait’s quotes from the speech have Ryan denying income inequality. Indeed, if you read the entire speech — which I recommend — Ryan never denies income inequality. You would think that if you were going to insinuate that someone is akin to a Nazi sympathizer, you would want to have evidence of the “denial” at issue. But you are not Jon Chait — unless you are Jon Chait, in which case I’m sorry for you, dude. Rather, Ryan argues in the speech that American policy should be focused on upward income mobility, rather than redistribution of wealth.

Second, in discussing mobility, Ryan said this:

The Treasury Department’s latest study on income mobility in America found that during the ten-year period starting in 1996, roughly half of the taxpayers who started in the bottom 20 percent had moved up to a higher income group by 2005.

Meanwhile, half of all taxpayers ended up in a different income group at the end of ten years. Many moved up, and some moved down, but economic growth resulted in rising incomes for most people over this period.

Another recent survey of over 500 successful entrepreneurs found that 93 percent came from middle-class or lower-class backgrounds. The majority were the first in their families to launch a business.

Those studies are consistent with a recent study by a Panel Study of Income Dynamics from the Federal Reserve Bank of Minneapolis, covering 2001-07, and a Census Bureau study of US households in poverty. To be sure, there are studies like one Chait cites, suggesting there is less income mobility in the US than in various European countries — but there are studies pointing the other way, too. (Indeed, had Ryan chosen to expressly address income inequality, as opposed to income mobility, he could have cited a number of studies suggesting the issue is overstated and expert opinion that income inequality has its benefits, promoting innovation and economic success — a position contrary to the right’s supposed denial of the phenomenon.) If Ryan is to be accused of ignoring “the studies,” despite having cited studies, then Chait is equally guilty.

Less than three months ago, Chait wrote:

Conservative pundits, while usually slanting their account in highly partisan and often misleading terms, do a fairly good job of grasping and explaining the fact that the two parties fundamentally disagree on the causes of and solutions to the economic crisis and the long-term deficit. In this sense, a Rush Limbaugh listener may well be better informed about the causes of the impasse than listener of NPR or other mainstream organs. The former will have in his mind a wildly slanted version of the basic political landscape, while the latter’s head will be filled with magical thinking.

When it comes to income inequality and mobility, it’s Chait wearing the magical thinking cap. Unable to acknowledge that debatable questions are in fact debatable, Chait slinks into the gutter, insulting the memory of the Holocaust in the process. It is the sort of tactic employed when losing a debate.

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Trends in the Distribution of Household Income Between 1979 and 2007
October 2011
***************
***************

Summary
Text-only. The full version of the summary may include tables, charts, and footnotes.

After-Tax Income Grew More for Highest-Income Households
After-tax income for the highest-income households grew more than it did for any other group. (After-tax income is income after federal taxes have been deducted and government transfers—which are payments to people through such programs as Social Security and Unemployment Insurance—have been added.)

CBO finds that, between 1979 and 2007, income grew by:

275 percent for the top 1 percent of households,
65 percent for the next 19 percent,
Just under 40 percent for the next 60 percent, and
18 percent for the bottom 20 percent.
(More……)

http://cbo.gov/doc.cfm?index=12485
===================================

Entire Document:

http://cbo.gov/ftpdocs/124xx/doc12485/10-25-HouseholdIncome.pdf

Full Summary:

http://cbo.gov/ftpdocs/124xx/doc12485/WebSummary.pdf

canopfor on October 27, 2011 at 4:08 AM

canopfor on October 27, 2011 at 10:17 PM

First, none of Chait’s quotes from the speech have Ryan denying income inequality.

Yes, but then you’d have to believe that Ryan is denying that people making more than others based on what they’re worth to the people writing the checks is, in fact, the greatest economic evil of the 20th Century. Only an idiot would deny that. It’s practically exactly what the Nazis were doing.

HitNRun on October 27, 2011 at 10:18 PM

Why does anyone pay attention to Chait? Is it because of his supposed credentials? The guy’s an admitted bigot — he admitted he’s not a thinker years ago with his “I Hate Bush Just Because” screed.

Crawford on October 27, 2011 at 10:21 PM

“The Ideological Fantasies of Inequality Deniers,”

My response to the accusations like this is that they are all Truth Deniers.

JellyToast on October 27, 2011 at 10:26 PM

For liberals, income inequality is the new global warming
*********************************************************

No sh*t,ever since Team Hopey/Changey had to do (a do over)
in his botched swear-in as Prez,he was no doubt,to d*mn giddy
with disbelief,that he was gonna be POTUSA,and in such,from
that day forward,er(redo oath),later in the afternoon,all these
new fangled Progressive Buzz Words,er,Talking Points,have flooded
the MSM,net,and every other concievable informational type highway
thingy!

And,as a bonus,just before the 2012 Election!!

canopfor on October 27, 2011 at 10:26 PM

“Rising income inequality, like climate change, is an ideologically inconvenient issue for conservatives. … The underlying facts, like the facts of climate change, are stark. Over the last few decades, income growth for most Americans has slowed to a crawl, while income for the very rich has exploded.”
=================================================================

Time to inspect the ICE CORE SAMPLES!!!!!!!!!!!!!!!!!
(sarc)

canopfor on October 27, 2011 at 10:29 PM

“The Ideological Fantasies of Inequality Deniers,”

My response to the accusations like this is that they are all Truth Deniers.

JellyToast on October 27, 2011 at 10:26 PM

JellyToast:A new heightened,”Class-Warfare”!:)

canopfor on October 27, 2011 at 10:31 PM

Ya,know,I’m start’n to believe,that waaaaaay back when,
in the days,of Barry Soetoro,he had a fantasy of RUINING
AMERICA,in some perverse way!!

canopfor on October 27, 2011 at 10:33 PM

Ya,know,I’m start’n to believe,that waaaaaay back when,
in the days,of Barry Soetoro,he had a fantasy of RUINING
AMERICA,in some perverse way!!

canopfor on October 27, 2011 at 10:33 PM

No, much more than a fantasy. It was his life’s mission. Just look at his parents, one a hippie chick, the other an anti-British, anti-American socialist. He’s made them proud.

TXUS on October 27, 2011 at 10:39 PM

WHEN FOLKS LIKE STEVEN JOBS BECOME RICH ND GET RICHER, POORER FOLKS DO NOT BECOME POORER.

WE ALL GET RICHER.

14 OF THE TOP 20 BILLIONAIRES MADE THEIR FORTUNE IN THE LAST 2 DECADES.

NONE STOLE.

NONE WERE GREEDY.

NONE MADE POOR PEOPLE POORER.

THE RICHEST GUY IN THE LAST 50 YEARS WAS WALMART, AND ALL HE DID WAS BRING VALUE TO THE AMERICAN CONSUMERS WHO NEEDED IT MOST. THE POOR PEOPLE.

AND RICH FOLKS LOST MORE MONEY IN THE LAST 2 YEARS THAN EVERYONE ELSE COMBINED.

LEFTISTS ARE TWISTED BY ENVY AND COVETOUSNESS.

THEIR CLASS WARFARE TACTICS WILL BACKFIRE.

reliapundit on October 27, 2011 at 10:41 PM

I watched a movie this evening, called “Red State”. Apparently there is this fundamental church that goes after gays with a vengeance, to the point of torture and murder. Plus they have automatic weapons up the ying-yang and will kill anyone who comes close to them. This is Hollywood at their breathtaking finest./

betsyz on October 27, 2011 at 10:45 PM

First time I was able to listen to the whole speech…

… Excellent points, but he needs to be saying this in front of a crowd that applauds, where he can raise and put emotion into his voice, maybe with theme music in the background, building ever so slightly to the climax at the end.

Just sayin’…

Seven Percent Solution on October 27, 2011 at 10:45 PM

… Excellent points, but he needs to be saying this in front of a crowd that applauds, where he can raise and put emotion into his voice, maybe with theme music in the background, building ever so slightly to the climax at the end.

Pity Leni Riefenstahl died before she could direct the film version.

Crawford on October 27, 2011 at 10:47 PM

Wait — Ryan’s speech or Chait or one of Obama’s? The “he” part wasn’t clear.

Crawford on October 27, 2011 at 10:48 PM

You would think that if you were going to insinuate that someone is akin to a Nazi sympathizer, you would want to have evidence of the “denial” at issue. But you are not Jon Chait — unless you are Jon Chait, in which case I’m sorry for you, dude.
BY KARL

I couldn’t stop rereading that line.

: )

listens2glenn on October 27, 2011 at 10:48 PM

You would think that if you were going to insinuate that someone is akin to a Nazi sympathizer, you would want to have evidence of the “denial” at issue. ”

But don’t confuse Chait with the facts…..

LL

Lady Logician on October 27, 2011 at 10:51 PM

Income inequality is a fact. Other relevant facts: intelligence inequality, motivation inequality, self-discipline inequality, charisma inequality, talent inequality, family support inequality, moral fiber inequality, cultural dysfunction inequality, etc., etc., etc.

Golly, there seems to be more going on here than “you have more so gimme some.”

OhioCoastie on October 27, 2011 at 11:12 PM

I’m more than 60 years old and I do not remember “Income Inequality” being an issue until recently.

Of course incomes are unequal. They always have been and always will be. People who have the right skills and drive accomplish more and get compensated accordingly.

This “issue” is just political theater. What’s next, decrying “gravitational inequality” for fat people?

schmuck281 on October 27, 2011 at 11:13 PM

WHEN THE CHIPS WERE DOWN……..

…..and the very survival of our nation was at stake (with a 2nd Obama term hanging over the Republic) Ryan took a pass and decided he didn’t need to run for the Presidency.

…..just like Big talking Sarah Palin.

…..enough talk, put your money where your mouth is so called Conservative “public servants”.

PappyD61 on October 27, 2011 at 11:45 PM

schmuck281 on October 27, 2011 at 11:13 PM

Don’t give them any ideas.

chemman on October 28, 2011 at 1:01 AM

There will always be income equality. Even if everyone had the exact same income, some would put it to better use or make it go farther based on their talents and ingenuity.

Cindy Munford on October 28, 2011 at 1:36 AM

CBO finds that, between 1979 and 2007, income grew by:

275 percent for the top 1 percent of households,
65 percent for the next 19 percent,
Just under 40 percent for the next 60 percent, and
18 percent for the bottom 20 percent.
(More……)

28 years at 2.5% inflation a year is 70%. Factor in exploding health care costs and slashed worker benefits and this is a perfect example of why those OWS protesters are so aggravated.

Remember, the problem isn’t income inequality. The problem is income inequality expanding at an exponential rate.

Rainsford on October 28, 2011 at 2:58 AM

Chait was a liar and propagandist even before they organized to manage the news with Journ-O-List. He can be counted on to say whatever he believes will advance the leftist cause without regard to abstract bourgeois concepts like “truth” or “accuracy.”

For a free market take on the reasons “income inequality” is not a bad thing, try Professor Richard Epstein on PBS vis PowerLine.

He doesn’t even touch upon two very significant points at all, though. First, although the poor have gained less, they have gained in income, and the level of benefits for the poor isn’t included. In societies where the “income inequality” is static or shrinking, there is less overall growth and less increase for the poor. So the left is basically saying, “The poor should be even poorer, only so the rich aren’t any richer.” Which is sadistic and insane, IMHO.

Secondly, the level of our “poverty” has dramatically increased in relation to what constitutes “poverty” in the rest of the world. The conditions of our average “poor” person today would be in the upper 10% of wealth in most of the world’s nations. We achieved that huge gap by allowing “income inequality” which created so much wealth we can afford to subsidize people who in other cultures would be giving alms to the poor. This is the system ignorant leftist twits like Chait wish to tear down.

Adjoran on October 28, 2011 at 3:02 AM

Jesus said, “The poor you will always have with you.” So obviously Christians are not denying income inequality. Does anyone, really?

So if Jesus wasn’t out to abolish poverty, why do progressives think they can do it? Apparently, progressives think they are so much better than Jesus……

There Goes The Neighborhood on October 28, 2011 at 3:02 AM

So to have a fair society, it should be:

From each according to his ability, to each according to his need (or needs)

…and our theme song could be this little gem:

http://en.wikipedia.org/wiki/The_Internationale

Thank God for the second amendament!

patch on October 28, 2011 at 6:21 AM

Has anyone else noticed that the progressives have spent the last seven decades denying that capitalism has lifted more people out of poverty than any other system? Also, at zero, it has a much lower body count than communism.

Kafir on October 28, 2011 at 6:59 AM

There Goes The Neighborhood on October 28, 2011 at 3:02 AM

The wisdom of Jesus’ words there is that poor is a relative term. The average poor person in America would be considered filthy rich is some other parts of the world. A while ago, I read a statistic that said in order to be in the top ten percent in worldwide wealth, all you needed was to be the owner of two pairs of shoes.

Kafir on October 28, 2011 at 7:02 AM

Ya,know,I’m start’n to believe,that waaaaaay back when,
in the days,of Barry Soetoro,he had a fantasy of RUINING
AMERICA,in some perverse way!!

canopfor on October 27, 2011 at 10:33 PM

And he’s well on his way to doing so.

Here’s more evidence. This is off-topic, but hugely important:

Zubrin: Obama Readies to Blast NASA

By Robert Zubrin, Washington Times, 10.26.11

Word has leaked out that in its new budget, the Obama administration intends to terminate NASA’s planetary exploration program. The Mars Science Lab Curiosity, being readied on the pad, will be launched, as will the nearly completed small MAVEN orbiter scheduled for 2013, but that will be it. No further missions to anywhere are planned.

After 2013, America’s amazing career of planetary exploration, which ran from the Mariner probes in the 1960s through the great Pioneer, Viking, Voyager, Pathfinder, Mars Global Surveyor, Mars Odyssey, Spirit, Opportunity, Mars Reconnaissance Orbiter, Galileo and Cassini missions, will simply end.

Furthermore, the plan from the Office of Management and Budget (OMB) also leaves the space astronomy program adrift and headed for destruction. The now-orbiting Kepler Telescope will be turned off in mid-mission, stopping it before it can complete its goal of finding other Earths. Even worse, the magnificent Webb Telescope, the agency’s flagship, which promises fundamental breakthroughs in our understanding of the laws of the universe, is not sufficiently funded to allow successful completion. This guarantees further costly delays, with the ensuing budgetary overruns leading inevitably to eventual cancellation.

The administration’s decision to derail planetary exploration and space astronomy is shocking and portends the destruction of the entire American space program. . .

The whole article here:
http://www.marssociety.org/home/press/tms-in-the-news/zubrinobamareadiestoblastnasa

and in The Washington Times.

MrLynn on October 28, 2011 at 8:09 AM

I’m sorry to repeat myself at Hot Air but it’s gotta be done. It’s the New York Times and or the Washington Post. WTF do you expect, after 5,295 articles about shoddy journalism at the New York Times and or Washington Post.

And why does Hot Air continue to link stories to these fraudulent publications, at the top of the website again?

MNHawk on October 28, 2011 at 8:23 AM

Paul Ryan gives me actual hope.

As opposed to Obozo, who provides to me, no hope at all.

KMC1 on October 28, 2011 at 8:46 AM

I am glad my income is unequal to others. I’m glad I make more than an entry level computer programmer, now, after 27 years of work. In fact, I’d be livid if they hired someone out of college at my salary level. I’m glad I make more than a burger flipper. I’m glad I provide more value now than I did when I started my career and that I’m compensated accordingly. I’m glad there are people who are rich and super rich, because that means I can get a job and be paid well (because without wealth somewhere, there would be none to distribute to me for the work I do). And, I wouldn’t mind being a little rich myself. Rich people have more free time, more ability to give both time and treasure to those in need (real need) voluntarily. To those who have been richly blessed, more is expected… but not forced (as in government coercion). Liberals who invoke Christian teaching always seem to miss the whole free will thing. They may indeed believe that “we” must help the downtrodden and must somehow “equalize” things or at least give someone the basics (food, clothing, shelter), but they insist the “we” do so lest we be jailed, fined or otherwise coerced. They count that as compassion, which is really twisted.

And did you ever notice that being rich is pretty much okay with them as long as you gained your riches through some form of art (into which I loosely lump actors/actresses) or sports? In fact, business guys can be okay too as long as they (say they) loathe themselves for their wealth (e.g. Buffet). But “artists” are always given a pass. Weird, huh?

BillyWilly on October 28, 2011 at 9:22 AM

What about those Constitution deniers?

Akzed on October 28, 2011 at 9:30 AM

PappyD61 on October 27, 2011 at 11:45 PM

So Pappy, when did we change our system to a monarchy or dictatorship? Exactly what could Paul Ryan or Sarah Palin do as President without the full cooperation of Congress? Don’t we need people in Congress like Ryan to ensure the House and Senate also so the right thing? Don’t we need people speaking out in the media to counter the massive bias in the media, like Palin?

I think your bitterness is clouding your thoughts. The presidency isn’t the only place we need strong conservatives.

BillyWilly on October 28, 2011 at 9:34 AM

Rainsford on October 28, 2011 at 2:58 AM

While you conveniently ignore the most significant fact of all, that more than 50% of people transition upward in income ranges over a 20 year period. Tell me, how much does individual X’s income increase if he goes from being in the bottom 20% in 1979, and ascends into the second-highest tier by 2007?

The BIG LIE hidden in these small facts is that while the population which makes up the top 1% doesn’t migrate downward very much (rich people usually understand how to stay rich as they get older and wiser), the bottom 20% is predominately made up of the 18-25 age bracket who have the fewest overall money worries, and THEY DON’T STAY THERE if they have half a brain.

As Thomas Sowell regularly points out about how such class warfare “facts” are lies in disguise, those people (and I am in that group) saw more like a 600% increase in their income across that 28 year span you moan and groan about. And the “bottom 20%” is not the same people from year to year, not nearly as much as the top 1%.

People grow up. They get skilled. They get more money. Or they rage at the machine from a pup-tent. Nobody will ever change that. Any attempt to force changes to “fix” that will do damage to everyone’s opportunity. Leave it alone.

Freelancer on October 28, 2011 at 10:11 AM

How do demographics skew this 1%/99% argument?

It’s pretty common knowledge that the Boomers and Millenial generations outnumber GenX. As the Boomers continue to retire and go from high paying jobs to retirement/social security and the Millenials are just starting out their careers, wouldn’t we naturally expect to see income equality look out of whack?

Aren’t the optics of income equality predominantly caused by demographic shifts in the workforce???

IrishTexan on October 28, 2011 at 11:45 AM

Chait is an arrogant, moronic prick. I find it hard to believe anyone takes him seriously.

woodNfish on October 28, 2011 at 11:17 PM