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How we should discuss income inequality

How we should discuss income inequality

I’ve been trying to articulate the way to engage with OWS-sympathizers for the past few weeks. It’s hard to write-off some aspects of the OWS gripes: some sectors have seen an inordinate amount of favoritism from the government while a lot of the middle class has fallen on hard times. My friend Trevor recently penned a piece on inequality that articulates – in far more lucid terms than what I could produce – how we should think about income “inequality”:

While we understandably regard wealth as important because money can be turned into what we love, perhaps we should also be concerned with whether what we love can be turned into money. Money isn’t everything. In fact, for economists, money isn’t anything but an instrumental mechanism to achieve ultimate values. Yet, perhaps oddly, many of those who regard money and success as lesser values seem to analyze the world as if relative income and wealth are the only things that matter. If “creative types” are disproportionately represented in the OWS movement, then many of them have made choices in their lives in which they knowingly sacrificed absolute economic well-being for psychological satisfaction.

Ultimately, productivity made these choices available to them. Perhaps the simplest way of stating my point is this: a world with more choices is a world with more possibilities for divergence (i.e. inequality) along many different metrics. […] inequality and productivity travel together. Having more choices means that people can maximize particular inequalities based on subjective valuations.

Trevor writes about subjective values, opportunity and satisfaction extremely well.

I also think that a lot of people in favor of OWS are mourning the death of a dream. I can sympathize with that. A lot of the rhetoric I heard while growing up in the 1990s was akin to this: if you get good grades, go to a decent college, and don’t screw up, you can live comfortably. I think that, for a lot of folks who did just this, the past three years have been particularly difficult for them. It has been more of a struggle than they anticipated. Wall Street is their chosen scape goat, but I really doubt it’s the source of the difficulty a lot of 20-somethings have come across. That’s a post for another day, I suppose.

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Comments

In other words, some people enjoy reading Socrates more than a spreadsheet.

Donald Douglas | November 19, 2011 at 2:20 pm

It’s not the death of the dream, but the death of liberty in the country. Restore economic freedom and we’ll restore growth — and hope for the future. Anyway, the #OWS creeps and their allies across America’s campuses are violent anarchists and commies. And losers: “‘Down With Capitalist Education!’ — California Faculty Association Strikes at Cal State Dominguez Hills”.

dream… if you get good grades, go to a decent college, and don’t screw up, you can live comfortably

The American dream includes being an employee as a means to learn skills, network and gain work experience, or because it’s work one likes and is good at, or as the means to accumulate seed capital, or as the sacrificial grind of a previous generation to boost their children’s futures with wider options. Somewhere along the line in that dream were new ideas, inspiration, and the individual or collaborative creation of new businesses. We need to get back to facilitating entrepreneurship, from shoe-string and home-based on up, and we need some kind of overhaul in the way we view education. If you haven’t seen this video, it’s kind of neat. Food for thought:

http://www.youtube.com/watch?feature=player_embedded&v=zDZFcDGpL4U

A lot of the rhetoric I heard while growing up in the 1990s was akin to this: if you get good grades, go to a decent college, and don’t screw up, you can live comfortably.

I think “comfortable” needs to be defined. Its hard to make a living with a Women’s Studies degree. My niece has a degree in Biblical Counseling, only to find out those jobs are all volunteer! I think the expectation of a lot of recent college graduates is that they would come out of school and land a 6 figure income. My nephew did that…he obtained an Administration of Justice degree and then was fortunate enough to get into the California Highway Patrol academy and worked hard enough to graduate the program. But he is one of the few to make that jump. I think that most of us had to work our way up. I don’t see why it should be any different for college graduates, now that most everyone has a degree these days. College is the new high school, now that high schools are turning out kids who can’t read!

A couple of things to think about:

1. Is it better to have a system where the highest family income is $30,000 per year and the lowest is $10,000 annually, or one where the highest family income is in excess of $1 million annually and the lowest is $20,000 annually? You can change the numbers, of course; the question is whether greater inequality of income is a good thing as long as the poorest families are better off, or, more generally, to what extent income inequality is desirable if the poorest are made better off.

2. I grew up comfortably middle-class in the 1950s and 1960s (my father was a patent attorney; attorneys in general, including patent attorneys, made far less compared to the average wage-earner than they do now). We were happy. We were happy although we didn’t have a color television until 1965 or so (color television didn’t even exist until 1956), central air-conditioning until 1968 (we had a room air-conditioner in the early 1960s, and then moved in 1963 and had no air-conditioning until 1968 – this was in norther Illinois), and, of course, no computer, no iPod, no mobile phone (not even touch dialing; every telephone was rotary-dial until early 1965), no DVD player (nor even a VCR machine). In sum, a family of five can, for perhaps $30,000 per year (I’m uncertain as to the exact number), live as well as we did then. Is it still possible to be happy without the things that we didn’t have then? If not, why not? Bear in mind that the typical poor family in the United States today has every one of those things.

    herm2416 in reply to Iowa Jim. | November 19, 2011 at 3:51 pm

    I agree–what we define as needs, are truly wants. Do we need three cars in the driveway, cable tv in four rooms, various hand-held Nintendo for each child in the family? An unequivocal NO!

    With regard to inequality–if I have graduated from college and have a Masters degree–will I be better off than a high school graduate.? More than likely, yes. Because I have invested my time in furthering my education, the more likely I am to continue my education by reading as much as I can in my chosen industry (I used to be a stockbroker). Now, if I continue to read and educate myself, the more likely it is that I will continue to expand my client base. Which I did. Now compare my experience to someone who barely made it out of high school; or, indeed, to someone who willingly dropped out. The chance that this person will continue her education, either by reading or going back to school, is next to nil. While I continue on an upward trajectory, in terms of knowledge gained, she either flatlines, or has a slight upward trajectory with life experience. Now, fast forward twenty years, who WOULDN’T expect a difference in income? To call it inequality cheapens what I have invested in myself….and doesn’t hold the other person accountable for her life choices. We have put diametrically opposite effort into our lives. There are inequalities in a myriad of categories in our lives….the left/media have chosen to make a bogeyman of high wage earning vs. low wage earning people. What if they placed inequality in terms of people who don’t pay taxes, shine a bright light on them, rather than people who are being asked to pony up even more because $250,000/yr is considered very wealthy. It might be in Peoria, but I bet it isn’t in DC. Inequality is a relative term–the media just doesn’t paint it that way.

How do I engage in conversation with the organizers?
http://www.discoverthenetworks.org/groupProfile.asp?grpid=7694

Answer I guess – we’re in the twenty-first century equivalent of the hundred years of Religous War of Europe of the Seventeenth Century. Picture the Protestant and Catholic Armies rolling back and forth over the Hanseatic League in “The Thirty Years War” or “The English Civil War”.
From Blue state Maryland I was intrigued to discover there was a “Virginia v Maryland” war between the “Royalists” [Cavaliers] and the Puritans.

What “The Little Red Book” was to sixties protesters the
Tarnac “The Coming Insurrection” is to the ‘believers’ in todays protests here and in Europe

http://tarnac9.wordpress.com/texts/the-coming-insurrection

I’d say the books name is coincidental to LI, but it happens to be the what/why that caught my attention and led me to LI.

The issue of merit is not relative but absolute disparity.

Within each economic jurisdiction the market is influenced by the median income.

The principle that followed from enlightenment was individual dignity which rejected superior or exceptional dignity. We acknowledge that we are not equal physically, mentally, or emotionally. However, despite our differences, whether male or female, rich or poor, entrepreneur or worker, etc., we respect each others individual dignity.

A society based on optimal liberty requires its members to practice self-moderating behavior, which is only possible when those individuals adhere to a common moral code. The introduction of totalitarian policies should be reserved to hold accountable individuals who succumb to corruption or otherwise choose to fail. The normalization of involuntary exploitation is a principal contributor to progressive corruption of individuals and society.

There is no value to replace fraudulent exploitation with involuntary exploitation. The “occupy” movement needs to recognize that they are condemning one form of corruption while favoring another.

The prevailing dream of physical and material instant gratification through redistributive and retributive change are the premise for the destructive cycles throughout history and throughout the world.

The bottom-line is that we are not equal, except in rights, and we exist in a world where resources have limited accessibility.

Not everyone will occupy a beachfront property in Hawaii.

[…] McCaffrey ponders liberal myth and Organize Wall Street peeves, one and the same, from Legal Insurrection: I also think that a lot of people in favor of OWS are mourning the death of a dream. I can […]

This is a problem: “A lot of the rhetoric I heard while growing up in the 1990s was akin to this: if you get good grades, go to a decent college, and don’t screw up, you can live comfortably.”

There’s a lot of talk like that these days. People used to think a job at GM was a life guarantee. Kids used to think a college education was a sure thing to high income and modest wealth. Older workers think pensions and social security will keep them happy on the golf course forever.

Really? These are bad thoughts. There are no guarantees. The idea that something is guaranteed– that you’re entitled to it because you got your ticket or diploma or whatever– is the core problem. Work your way toward success. There is no guarantee.

I for one would like to see:

1.
A. Those who get ahead and do reall well admit that at least some part of that was “luck” or happenstance.
Yes, the saying goes that you make your own luck. And to an extent this is true but there are plenty of people with the skills and intellect who for whatever reason didn’t/don’t connect with the best place or position or company and spend years toiling away at a job they hate which means they don’t do as well.
B. Those that do really, really well also need to express a little more understanding and sympathy towards those who haven’t. Within in limits. Hand up not hand out sort of thing but mentally. Don’t think that because someone hasn’t reached a secure spot financially means they didn’t try.

2.
A.Those that don’t do really, really, well shouldn’t be jealous/envious (I get those confused) of those that do or think that somehow someone doing well means they took from YOU
B. Don’t advocate or vote for those who would penalize those that do really really well. Someday YOU might be there and paying through the nose. Plus class warfare serves only despots and petty bureaucrats. Not a great nation.

Just my two bits from personal experience. I’ve never done really, really well but I’ve done better than some and I’ve tried to remember when I was down and out and sympathize with those who are there now.

As I am once again but unfortunately due to my age and the predicted length of this downturn, I won’t be doing well, ever again and it bothers me that so many who claim the mantle of conservatism believe that the answer lies in through everyone off of any gov run benefit. They never answer the question; where will we all go? There aren’t enough jobs NOW for those who can work. How can I (being partially disabled) even think that I can compete with so many better qualified and fully abled? Are all the years I worked for nothing and now that I can’t I’m to be thrown (literally) on the trash heap to be mulched for plant food?

I don’t like the attitudes I see on both sides of the political spectrum. Neither one is facing reality.

Sorry for all the misspellings in previous. Too many to rewrite so I hope the gist of what I meant got through.

You have to start by realizing what you HAVE.

A. No one owes you a living. But – we as a society decided that we would band together and pool our money to provide an education for every single child in the nation. Instead of every community having to scrap together enough money for a one room schoolhouse and a teacher, we give you a fully funded education for 13 years. When you come out, if you have taken advantage of that gift, you should be fully prepared to make a good life for yourself. You owe it to society to go forth and prosper. Whether you go on to college, or not, is up top you, your family and your circumstances. And even if you are not wealthy, you can go on to higher education. Great thinkers, inventors and philosophers of old did not have this gift, many studied alone by candlelight – the #Occupiers would do well to reflect upon this.

B. No matter what your house is like, it is almost 100% guaranteed that you live better than the kings of old. You have light at the touch of a fingertip. You have hot and cold water, and much more that a monarch of old would have bankrupted his kingdom to possess. It’s all a matter of perspective. Your Disneyfied image of what life is ‘supposed’ to be may not match reality, but – if you live in this nation you have much to be grateful for, and it is up to you to appreciate it.

C. It is high time to start putting value on the people who take care of themselves. If you are single and taking care of yourself – you are not taking welfare and are not a drain on society – what is that worth? If you are married and taking care of yourselves, what is that worth? When you have children and you are taking care of an entire family, and often extended family, you are an asset to society and not a drain – what is that worth? When you pay your kids’ college tuitions, and do not take from society, you leave resources for those truly in need. When you are an employer, you provide, in full for multiple other families – mortgages, food, autos, healthcare and more – these assets MUST be recognized, valued, honored, and NOT ATTACKED OR DERIDED.

This is why the #occupy movement is so inherently evil and despicable. They have no respect or appreciation for what they have, are not grateful that they live in this century where they live, disease free, with access to healthcare, clean water, vast amounts of food, goods and services, and they refuse to take their rightful place and become an asset to those around them… They have bought into the rhetoric of those who would use them as pawns, and those who would use them are in fact the cause of the lack of employment right now. Lackadaisical drone-like mentalities are not active participants in making this a better place.

That’s the way I see it – running on too long, I know –

    Running on too long? Not at all. If you have more, share it. What you have said makes perfect sense. The real problem is that those who need to see this, do not look in the right places, probably because they do not want to see it or are afraid to see it.

Rose,

I request permission to use your reply.

I know too many middle class broke people. It’s their own damn fault.

When my employees drive up in car loans on metal that costs more than mine and my wife’s cars combined, that’s called stupidity. You try to coach them, but they know better. Broke people have the best vacations, the latest phones, the coolest electronic gadgets and the emptiest savings accounts.

When an unemployed 20 something racks up 50k in student debt and doesn’t finish school or worse, finishes and finds they don’t have the skills an employer values or they don’t have the grit to start their own gig, that is the kettle of soup they brewed for themselves.

I got ahead by going without luxeries for a long time. I don’t see that in broke people. They go w/out only when their credit is maxed out. Pardon my caustic attitude, but the nest of success is feathered by years of eating rice and beans, driving a beater car, and working 7 days a week, with many of those hours being at slave wages (especially if you own your own business).

…and this student loan crap. Did no one in the family realize that one day bambino was going to turn 18 and want to go on to higher ed… was this all a freaking surprise? Oh- after you were too short sighted to save for higher ed, was cash flowing junior college not good enough for someone too dumb to save for an education? You sure seem to have enough cash for the best cable TV and a house full of smart phones.

No- these people need a smack across the ahead, not sympathy.

You show me a broke person in the middle class, and I’ll show you years of bad decisions.

How about all of those years of school sports that were supposed to teach Junior all of those important skills. Maybe we ought to start valuing having an after school job a little higher than that garbage. You’ve got kids graduating with 18-30 seasons of school sports under their belt and not one job for the entire duration of their youth.

Wow, and you tell me they are having trouble finding a job when they are older???? Call Ripley’s believe it or not!!!!

Parents will spend a season of Saturdays to watch Junior compete against other kids on a court or a mat, which alledgedly gives them “really important” skills, but God forbid they spend an equal amount of time working on writing, speech, math. Here’s an idea, go take a refresher on Poor Richard’s Almanac.

No- all I have for broke middle class people is a big fat “I effing told you so.”

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