Our liberal friends like to talk about inequality, and we know why. Liberals are deeply concerned about the increase of economic inequality since 1980. There’s even a book about it: The Great Divergence, by Timothy Noah, adapted from a ten part online article published on Slate in 2010.
Here’s the basic problem, according to Noah. In the 1920s, the top 10 percent of income-earners took home about 45 percent of “market income” that excluded government transfers. Then, during World War II, this share plummeted to 35 percent and stayed there until about 1980. Since then, the top ten percent has been increasing its share, and now it is back up to 45 percent. This is “not a change for the better,” writes Noah.
It’s not due to race or gender, says Noah, because blacks and women have done better over recent years. Could it be immigration? No, economists “find little evidence that immigration harms the economic interests of native-born Americans.” Yes, it impacted the low-skilled, but it did not really harm the average worker. Could it be computers? Possibly, but inequality started up in the 1980s before the computer revolution really hit its stride.
What about evil Republicans? Now you are talking: lower-income quintiles did better during Democratic presidencies that Republican presidencies, but it is hard to know why. Labor unions? Well, the Republican Taft-Hartley Act, union-busting, and delays in minimum-wage increases really hurt. International trade? Maybe, maybe not. Maybe it’s the Stinking Rich — the finance, entertainment, and CEO stars — but nobody knows why. Thank goodness that Democrats aren’t to blame for any of this.
So what is Noah’s solution? According to Scott Winship, it’s this.
Noah wants to “soak the rich,” create a public-jobs program, “impose price controls” on colleges, “revive the labor movement,” and “elect Democratic Presidents.”
Wow! Those liberal writers can really think outside the box when they try!