What to do about wealth inequality?

The Washington Post asked twelve “experts” what to do about our nation’s “staggering economic inequality.” The Post’s Jeff Stein sets up his article by noting that the 400 richest Americans control more wealth than the poorest 80 million households, and “the richest citizens continue to capture the lion’s share of new wealth.” Indeed, “the top 5 percent has captured 74 percent of the wealth created in this country since 1982.”

I’m not sure “captured” is the right word. It’s likely that the top 5 percent played a key role in creating that wealth.

I like to ask those who throw such numbers around questions like “how much wealth in relation to the poorest 80 million households should the richest 400 Americans control?” and “what percentage of the wealth created in this country since 1982 should have gone to the top 5 percent?”

If your answer to the second question is 5 percent, then you have a coherent theory of wealth distribution. Unfortunately, the theory is known as communism, it entails mass repression and probably mass murder, and it can’t be made a reality even with all that repression.

If your answer is some other number, or a range, then, unless you provide a large amount of supporting analysis and data, your answer is arbitrary and expresses your personal aesthetic preference, not a moral imperative or a compelling basis for public policy.

The 12 experts Stein contacted proposed a grab-bag of agenda items, nearly all of them left-liberal. They included universal access to child care, funded by a tax on capital; “a big boost to union rights” coupled with a universal social wealth fund; dramatic expansion of social security; a national infrastructure program funded by the 1 percent; and so on.

Grover Norquist proposed various free market solutions under the heading “Get government out of the way, repeal rules and regulations.” His idea is to “make a list of those things government does to staple people to the bottom of the economic ladder, and then stop doing them.”

Makes sense to me.

But I thought the best “solution” came from our friend David Azerrad of the Heritage Foundation. He proposed “shipping the 1 percent to Venezuela.”

David explained:

A few years ago, I wrote a satirical piece called “Exile the Rich.” Because do you know how you solve inequality overnight? You round up the top 10 percent of the top 1 percent and send them to whomever will take them — Venezuela or Belgium or South Korea.

Presto: inequality problem solved.

Indeed, the rising inequality in the past four decades has been driven by a spectacular rise in the earnings of the top 0.1 percent; inequality in the 99.9 percent has not changed that much. Exiling the rich would get us back to the supposedly wonderful world we inhabited in the 1970s, according to New York Times columnist Paul Krugman, Bernie Sanders and Elizabeth Warren.

Here’s the thing: It wouldn’t improve life for a single American.

I don’t deny that Americans, especially Americans with low levels of education, confront very serious problems. The problem is linking those problems to the statistical abstraction that is rising income inequality. You could solve “the inequality problem,” and it wouldn’t do anything to help the millions of men who have dropped out of the labor force, or improve America’s failing schools, or stem the opioid epidemic, or address any other of the challenges facing the poor and the working class.

(Emphasis added)

There may be decent policy arguments in favor of some of the ideas Stein’s left-liberal experts proposed. But of these, the only ones that find their justification in the goal of reducing income inequality are those Norquist offered to end the things government does that staple people to the bottom of the economic ladder.

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