Green Room

Godwinning the income inequality debate

posted at 1:18 pm on October 27, 2011 by

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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nice piece!

homesickamerican on October 27, 2011 at 2:14 PM

What inequality?

mrt721 on October 27, 2011 at 2:27 PM

In other words

Opposite Day on October 27, 2011 at 3:03 PM

From the Epstein thread:

The whole notion of “increasing income inequality” is specious.

Take a ten-inch rubber band. Mark “Poor” on one end, “lower 10%” about an inch from that end, and “top 1%” near the other end. Clamp the “poor” end in a vise — no matter what you do, some people are going to be broke — then stretch the rubber band until it’s 20 inches long.

The “poor” is still poor, the “lower 10%” moved only an inch, and the “top 1%” moved almost 10 inches!!!! What a shock!!!!

cthulhu on October 27, 2011 at 2:56 PM

cthulhu on October 27, 2011 at 4:27 PM

Opposite Day on October 27, 2011 at 3:03 PM

Maggie was awesome.

J.E. Dyer on October 27, 2011 at 6:00 PM

right on cue the cbo has done a report to fit in with the 99 percent movement (formerly the ows)

naturally, lots of stuff in there. the growth of the one percent due to complexity, specialization, size. I think mostly due to globalization…large funnel effect, esp. in the financial area. the senior executives that i know don’t have easy lives, imho.

and contrary to barry’s opinion, docs are very hard working people that won’t just cut something off to make a little extra money (seriously, can you believe we have such an ignorant little man for a president?)

also, the assortment effect of two income families, vs. one income has to be part of it.

but, i know the left doesn’t care about the ‘why’…they want the money…after all, the producers will always produce…it is what they love to do

r keller on October 27, 2011 at 7:37 PM

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Allahpundit on October 28, 2011 at 1:48 AM