Education

Boston Review Gets Serious About Tackling Income Inequality

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The Boston Review just hosted a forum titled "What to do about income inequality" featuring a lead essay by Stanford University's David Grusky and a number of responses including one from yours truly. Grusky is a big name with big credentials and he argues that progressives make a big mistake when they tackle inequality by focusing exclusively on redistributive taxation. He is no foe of such policies, mind you. He just believes that they misdiagnose the true cause of income inequality, which lies in the pre-tax income generated in the market. He explains:

As important as tax-based redistribution is, we need to supplement it with policies that address market inequality. We would do well to look to OWS for inspiration here. Although OWS hardly sings with a single voice, one line in the polyphony implies an institutional critique of inequality and a market-based remedy for it. The institutional critique is not about the tax system but about the ways in which American labor and capital markets generate extreme pre-tax inequality. The core idea is that powerful players have built self-serving and inequality-generating institutions that are often codified in law and come to be represented—through an ingenious sleight of hand—as laissez-faire capitalism.

We all are familiar with the argument that extreme inequality is the inevitable outcome of a highly competitive market. The institutional critique turns this idea on its head and implies that extreme inequality comes from a lack of competition and associated market failure. Put simply, we'd have far less inequality if our labor market and other institutions were more competitive—if our commitment to competition weren't mere lip service but were honored even when the rich and powerful would lose out.

In other words, the root cause of the income inequality malady lies in how rich people acquire their pre-tax income—by rigging the rules of the market to extract illicit "rents." Therefore redistributive taxation targets the symptom not the cause.

There is much here to warm the heart of free market libertarians (myself included) and progressives, both of whom are easily worked up about crony capitalism, corporate welfare and what have you. But my issue with Grusky is that his claims about rising income inequality are seriously overblown. And even if they weren't, it wouldn't automatically follow that we should care. I note:

Any indictment of capitalism worth its salt has to show not just that the rich are getting richer, but that they do so by making the poor poorer. There is no evidence of that. Facebook recently floated an IPO making Mark Zuckerberg the richest 27-year-old in America. I didn't notice my bank balance dip…

America remains a highly income-mobile society where poverty is a stage of life, not a way of life. There is no permanent underclass here. A study by Thomas Garrett of the St. Louis Federal Reserve recently found that between 1996 and 2005—nine short years—roughly half of taxpayers who began in the bottom income quintile moved up to a higher one.

This doesn't mean that Grusky's suggestions to eradicate economy-distorting rents are not worth pursuing. It is just that we should do so in the name of creating a level playing field and maximizing economic opportunities, not reducing income inequality.

All the responses are worth checking out, including one by the chief peddlers of income inequality gloom-and-doom, Thomas Piketty and Emmanuel Saez. They disagree with Grusky that progressives shouldn't get fixated on redistributive taxation and trot out their research showing that:

Countries that made large cuts in top tax rates, such as the United Kingdom and the United States, have not grown significantly faster than countries that did not, such as Germany and Denmark. Hence, a substantial fraction of the response of pre-tax top incomes to top tax may in fact be due to increased rent-seeking at the top rather than increased productive effort.

The bottom line is that rich countries have all grown at roughly the same rate over the past 30 years, in spite of huge variations in tax policies. Using a model in which the response of top earners to top tax rate cuts is due in part to increased rent-seeking behavior and in part to increased productive work, we find that the top tax rate could be as high as 83 percent—as opposed to 57 percent in the pure supply-side model—without harming economic growth. (Emphasis added.)

Oooo….kay!

Also useful is the contribution of Cato Institute's Neal McCluskey who takes Grusky to task for completely misunderstanding the concept of market failure.  Grusky irritatingly refers to the scarcity of college seats created by the higher ed cartel as "market failure." But market failure, technically speaking, occurs when the market can't find a way to cost-effectively provide goods that consumers want. The classic examples are roads and highways. But a market that doesn't deliver the desired results because government regulations and policies prevent it from functioning efficiently, as is the case with the higher ed industry, is an example of government not market failure. Notes McCluskey:

[T]here are significant problems in American education… They cannot, however, be pinned on market failure.  In higher ed, government intervention is central to creating bottlenecks. Foremost, college prices rise even more quickly than health care costs largely because the federal government, through student aid, ensures that students can pay them. But aid programs generally favor middle- or upper-class parents who have the personal or accountant savvy to take full advantage of loans and tax credits through effective long-term planning. A 1999 study reported by the National Center for Education Statistics shows that poor parents are dramatically less likely than wealthy ones to estimate the costs of college.

But arguably the most comprehensive account of the problems with Grusky's essay is by Brown University's Glenn Loury. He says:

I find much of the detail in Grusky's argument to be unpersuasive or just plain wrong.

The wage premium for college graduates over those with a high school education is not due mainly to non-competitive behavior by elite colleges artificially limiting their enrollments. Nor is it mainly due to the shortage of highly skilled workers that comes about because of abysmal public schooling for the poor. Neither is excessive executive compensation—as unseemly and infuriating as it can be—an important source of economic inequality at the top of the income distribution. (There are too many high-earning lawyers, doctors, athletes, financial analysts, entertainers, entrepreneurs, small-business owners, scientists, and engineers for this to be so).

In Grusky's rush to adopt a language of "market failure" so as to criticize unequal market outcomes, he gives short shrift to the larger structural forces that are at play here, over which no one has much control: forces such as globalization, technological change, social segregation, and middle class–oriented interest group politics. What economists call skill-biased technological change is not a market failure—it's a fact of life. Likewise, the impact of competition from low-paid offshore labor is an effect that won't yield to marginal policy change or the obvious "progressive" (i.e., trade-restricting) legislation.

Couldn't have said it better myself. The whole forum is well worth perusing.

NEXT: Why Whitney Houston Died: Drugs, Heart Disease Played Roles

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  1. I’m sorry, but when did “progressives make a big mistake when they tackle inequality by focusing exclusively on redistributive taxation.” I’ve not heard anyone serious who talks only about taxation as a means to end income inequality except people trying to marginalize progressive voices.

    1. Again, I blame videogames.

      1. (Hey, it made almost as much sense as Nathan did.)

          1. Not even with your junk dude.

          2. Not even with your junk dude!

    2. Well by golly Nate, give us an example then, would ya?

    3. Progressives marginalize themselves.

    4. I blame Bush

      1. George W. Bush, the immortal scape goat.

        1. How is it, Kerry, I knew that you were approving a full scale invasion of Iraq, but you didn’t? Bush fooled you? Why, that tricky bastard!

          1. Its amazing how a president as dumb as Bush managed to fool all of those really smart people.

    5. Nathan|3.22.12 @ 9:14PM|#
      …”I’ve not heard anyone serious who talks only about taxation as a means to end income inequality except people trying to marginalize progressive voices.”

      Shorter Nathan:
      ‘if you don’t agree with me, you’re not serious!’
      Nathan, meet shithead. Shithead, please meet Nathan. You folks have a lot in common.

      1. They talk a lot about the problems of corporate welfare. The true Left criticized TARP. The Left criticizes corporate personhood that keeps executives from responsibility for corporate crimes. He’s right, that this criticism is simplistic.

        1. not a mention of inflation? Jeez. That’s taxing the poor to give to the rich.

          1. BINGO

          2. I mean, inflation is one of my huge issues, but I’m not convinced most on the Left give a crap, because they don’t seem to understand monetary economics.

        2. Some may talk about corporate capitalism but they think that is the free market. They may be against TARP but then they are for bailing out GM or people who took out too much in student loans. They are inconsistent and incoherent. I still have hopes that Ron Paul or similar could still explain it to a few OWS kids so they’d finally understand.

          1. Explain what? Why they can’t have free stuff?

            Good luck with that.

          2. Again, I think it’s kind of hard to generalize. I think the Left are highly conflicted about corporate welfare. They know it’s wrong, but they don’t want to hurt jobs or unions. So they raise a stink about how bad/unfair the law is but as long as Obama and the Democrats reassure them about how important it is for protecting workers, they’ll fall in line at the ballot box. And their perception is still that the Republicans are still worse, as they praise billionaire rent-seekers and as the military-industrial complex is probably the least righteous form of corporate welfare.

            If there was a free market party that came out against rent-seeking and corporate welfare and did not praise rent seekers and corporations or insist on leaving their leaders unaccountable for their crimes, I think they’d at least give it a listen.

        3. The Left criticizes corporate personhood that keeps executives from responsibility for corporate crimes.

          Corporate person hood does no such thing. Just off the top of my head, I seem to recall Ken Lay being prosecuted for the crimes of Enron.

          1. The limited liability aspect of corporate personhood, which requires extreme financial crimes like what Ken Lay or Bernie Madoff did for a court to be willing breach. In all other cases, tort settlements are paid out of stockholder pockets. The responsibility disconnect and the golden parachute concept have led executives towards increasing irresponsibility. What are the stockholders going to do, fire them and give them a $10 million severance package?

            1. Well, you said corporate crimes, not corporate torts.

              Regardless, you are aware that limited liability protects only shareholders, and gives no protection whatsoever to employees, officers, and agents, yes?

              1. The general problem is that the corporation is considered a separate entity from the individuals involved with it. This blurs the line between where individuals are acting on behalf of themselves and where individuals are acting on behalf of the corporation. I understand the necessity of corporate personhood, in case the individuals don’t know who is responsible for the actions the have a legal mechanism to target – but in the case of both crimes and torts, it is the obligation of the government to locate and assign responsibility to the specific individuals responsible. And if both the individuals responsible and the corporation runs out of capital to pay for torts and penalties, it should come out of stockholders’ insurance (which doesn’t exist thanks to government-limited liability), not out of the victim’s pocket.

    6. You’re a dumb little shit. Name one major “income inequality” policy suggestion that does not involve redistributive taxation.

      1. You say “redistributive taxation” as if it’s a bad thing

      2. Minimum and living wage laws. Pro-union laws.

      3. He wasn’t saying it wasn’t involved. He was saying it wasn’t the only thing involved.

    7. I must’ve missed all those calls from progressives to cut spending. Please advise.

      1. Many progressives would love to slash military spending to the bone.

        And if you’ll remember, there are very few conservatives willing to slash spending as well. Look at Paul Ryan, so called “fiscal hawk”. Cuts to rates of increase are not cuts to spending and require very little political backbone.

    8. I’ve not heard anyone serious who talks only about taxation as a means to end income inequality except people trying to marginalize progressive voices.

      Really? I seem to recall our President stating that we should raise tax rates because, at some point, you have enough.

    9. He’s got a point, we’re more about using inequality as a means to increase taxation.

  2. “As important as tax-based redistribution is, we need to supplement it with policies that address market inequality. We would do well to look to OWS for inspiration here.”

    Uh, that red-lines the stupid meter.
    If the market tells you your skills ain’t worth shit, any alternative has to include people with guns taking from those whose skills are worth more than shit.

    1. It is fitting to mention shit in the same context as OWS.

    2. Amazing that a Stanford professor is looking to OWS for inspiration. Seriously?

      Can anyone tell me what exactly OWS has achieved other than extra OT for cops and sanitation workers?

      1. TO DO:

        violently displace homeless
        hoard feces in giant cauldron
        rape retarded girls
        blame displaced homeless
        yell about the Jews
        move donations to personal account
        pre-order new Mark Frauenfelder book
        spill shit cauldron near Jews

        1. And whine about anything else!

      2. Amazing that a Stanford professor is looking to OWS for inspiration. Seriously?

        Says a lot about the value of a Stanford education.

    3. ^^^THIS^^^

  3. u fukin republicans dont get it we just wanna make the world a farer place than it is now becuz the banksters adn corporatoins have totes fuked it up

    1. Banksters and corporations fucked up the world, okay. What fucked you up?

      1. Genetics.

        1. That’ll do it. Me, I got caught up in the wilding craze of ’89.

          1. “Wilding”

            Wow, I hadn’t heard that in…years. Good times, good times…

          2. wilding craze of ’89

            You mean the one made up by cops and the media?

            1. Knowing you, heller, you probably think Kool Thing was the best song to come out of ’89. News jack, Chuck D phoned that shit in.

              1. Chuck D phoning it in was about 10x better than most shit in ’89.

            2. It never got better than Day Dream Nation and you damn well know it!

              1. Sssh I’m listening to Kool Thing.

    2. Well met, strawman.

  4. Any explanation of rising income inequality that doesn’t start and, very likely, end with women’s autonomy is sadly incomplete.

    At the high end we have more dual income households based on marriages of consumption complementarity rather than the production complementarity of generations past.

    At the low end we have more single-earner households as society is wealthy enough to allow women to get divorced or have children without marrying and survive.

    So of course inequality across households will rise. The top quintile has twice as many earners as before while the bottom quintile has half (or less) as many earners as before.

    Greater returns to skilled labor in our more technologically and organizationally complex world would be reason number two. Rent seeking probably comes in at third place.

    1. Sexist! That statement is practically rape.

  5. As important as tax-based redistribution is, we need to supplement it with policies that address market inequality. We would do well to look to OWS for inspiration here.

    .
    He must’ve been really inspired by the OWS signs and demands calling for a “maximum wage”

    1. Oh, I misread that through the scope. I thought the signs read maximum range.

      1. Any idiot who calls for a maximum wage, needs to be slapped.

        1. Once you are making over 250k a year individually there needs to be a luxury tax eating up more and more incrementally as income increases. How much does one really need after all?

          Of course reinvestment into business would create a tax break to offset this, but it would also grow the economy then and balance it in a useful manner.

          1. Nando|3.22.12 @ 11:19PM|#
            …”How much does one really need after all?”

            As much as anyone wants, asshole.

            1. Why do you pick an arbitrary amount, Nando? Why not a higher, or even lower, number of dollars one *may* earn?

              Really, what other people make is none of your business, nor that of the government.

              1. They have a responsibility to the country that made them rich in the first place.

                1. Which they already do, by paying taxes and running businesses which employ people who pay taxes.

                  Give up the egalitarian pipedream, Nando. It’s a dead-end that only results in misery.

                  1. Show me one economy where a large disparity between the rich and the poor — and a shrinking middle class — is doing really well.

                2. Nando|3.23.12 @ 12:05AM|#
                  “They have a responsibility to the country that made them rich in the first place.”

                  No, the ‘country’ (whatever ignorant definition you chose for that) didn’t make them rich. They made themselves rich.

                  1. They didn’t do it in a vacuum.

                    1. What’s the ideal tax rate, then? Fifty percent? Seventy-five? Ninety?

                    2. 101%.

                    3. What’s the ideal tax rate, then?
                      101%.

                      Phil Collins, David Bowie, Sean Connery, Jenson Button, Lewis Hamilton, Stelios Haji-Ioannou, Michael Caine, Philip Green and Mick Jagger all have left Britain as tax exiles.

                    4. Don’t forget all the Beatles except Harrison. Mick Fleetwood and John McVie.

                    5. Economics for Cretins:
                      Me: Hi there, I’m selling sandwiches and you look hungry.
                      You: Why yes I am. I happen to have a form of currency that you value. How about we exchange?
                      Me: Okay.
                      *we mutually exchange to meet our needs*

                      So why do I owe you anything else if I gave you what you wanted and you gave me what I wanted? You needed me as much as I needed you, therefore I don’t owe you or society jack shit after we conduct our business. Oh sure, I might be obligated to pay for fire and police protection, but even then it’s a statist fallacy to say that only government can provide them using that to justify taxation.

                    6. Well, the first problem with this is… you’re making a profit from selling sandwiches.

                    7. Well, the first problem with this is… you’re making a profit from selling sandwiches.

                      Never mind he could have packed his own lunch that he grew himself on his own land… except he couldn’t pay the property tax, inheritance tax, etc. on the family farm without working for pay.

                    8. Exploitation! Occupy the Sandwich Supply!

                    9. Me: Hi there, I’m selling sandwiches and you look hungry.
                      You: Why yes I am. I happen to have a form of currency that you value. How about we exchange?
                      Me: Okay.
                      *we mutually exchange to meet our needs*

                      Hi, I was just sort of hanging around off to the side and noticed you two engaged in a mutually beneficial transaction while I was around. I’ll just take half of your money and half of the sandwich. Now we all benefit!

                    10. *we mutually exchange to meet our needs*

                      WITHIN AND AMONG THE STATES!!!!

                      SMAAASSHSHHH!!!!

                    11. Nando|3.23.12 @ 12:16AM|#
                      “They didn’t do it in a vacuum.”

                      They didn’t do it where there’s no water, either, so I guess the water did it?

                3. They have a responsibility to the country that made them rich in the first place.

                  Where does this “responsibility” come from?

                  And how, exactly, did “the country” make them rich in the first place? What I see, is people getting rich off of voluntary transactions,* where the people who gave them money got something in return, and don’t seem to feel that they are still owed anything.

                  *Aside, of course, from various flavors of rent-seeking which will not be reduced, and likely will be increased, through state-mandated redistribution.

          2. Isn’t it past your bedtime Nando?

            You’ll need your rest if you’re going to pass the 6th grade.

            1. I’ll bet he believes shit like this:

              http://front.moveon.org/the-el…..ds-to-see/

              Hell, he probably abuses himself to screeds like that.

              1. Or this:

                “Let’s all vote for the Democratic party this year. Local,state and national. In 4 years the debt will be paid off, taxes will be lower and all health problems will be history.”

                *puke*

          3. How much does one really need after all?

            Thank you Kim Jong-Il.

  6. There is no permanent underclass here.

    Ms. Dalmia – are you serious. Are you SERIOUS?

    As a MI resident (as I believe you are), we need look no further than Detroy-it, Flint, Saginaw and Benton Harbor for a damned-permanent “underclass”.

    Now, I – and I imagine you – would posit this is DUE to government actions, not due to “the market” (which barely exists any more).

    But “doesn’t exist”? It surely does. Generations of welfare babies having welfare babies.

    It may be “isolated” geographically to some degree, but it’s there.

    1. them welfair babies r the rethuglicans falt 4 not making the corporations pay their fare shar of txas like the rest of us hav 2

      1. You’re way too uptight to be a real pothead

        1. not enough spelling errors either

  7. “what to do about income inequality”

    Is the answer “nothing?” It’s “nothing,” isn’t it?

  8. CAN ANYONE please tell me how this video of Las Vegas’ Lake Mead drying up doesn’t affect the environment?
    http://www.guardian.co.uk/envi…..g-up-video

    We’re told not to breathe our air (smog advisories) or drink our water. We destroy everything nature does to help clean it up. It’s us.

    1. That would be that man-made lake, right?

      Doesn’t all the dripping irony make your keyboard sticky?

      1. But it’s getting less rain and spring runoff.

        1. It’s a man made lake in the middle of the fucking desert.

          1. Maybe it’s existence is worse

            1. Nando|3.22.12 @ 10:57PM|#
              “Maybe it’s existence is worse”

              Worse than what? Worse than you existing? You might be on to something.

          2. a government-made lake, to boot. Wasn’t Rachel Maddow ejaculating all over it a few months back?

            1. Imagery like that should come with a warning purely out of courtesy.

        2. Nando|3.22.12 @ 10:48PM|#
          “But it’s getting less rain and spring runoff.”

          Compared to when and for how long?

          1. Maybe it’s “getting less rain and spring runoff” because rich people don’t pay enough in taxes?

            Who can tell with morons like Nando. Hell, that answer probably makes sense to him.

        3. No, as a matter of fact, it’s not. Lake Meade’s water levels are going down as a direct result of increased usage from both Las Vegas and Los Angelas.

        4. THIS IS A DESERT!

          NOTHING GROWS HERE!

          MOVE!

          1. send them suite cases

            1. Uhauls.

      2. Yes a god damn man made lake that was created and is being drained due to decades of government intervention. The water market is one of the least free markets there is.

      3. That would be that man-made lake, right?

        Oh fuck. These late night treads are much more funnerer than the weekend threads.

    2. thatz rite boi the repugs r steeling r resoreses and using them 2 make there profits!

      1. I like this new sockpuppet. It’s like having a leftist Flavor Flav posting in the comments, and, well, there’s nothing about that sentence I didn’t like.

      2. Goodbye Tony, hello 420?

        1. 420 is being sarcastic.

          Nando is being sincere.

          The rest of you are being (fill in the blank).

          What blank? Ha-ha-ha

      3. I like 420 too. Not like he is wrong about repugs being thieves either. Last I look, they’ve approved a shit load of spending that some bubble living fucks are calling austerity.

    3. Oh, and:
      Nando|3.22.12 @ 10:29PM|#
      “CAN ANYONE please tell me how this video of Las Vegas’ Lake Mead drying up doesn’t affect the environment?”

      What “environment”. The Vegas strip? That environment?

      1. Las Vegas is a cancer on the land.

        1. Nando|3.22.12 @ 11:01PM|#
          “Las Vegas is a cancer on the land.”

          OK, folks. Here we have a pretender to WI status.
          Oh, the horror! People having fun, spending their money as they please! The HORROR!
          I’m no real fan of Vegas, but so far you seem to be a pimple on the ass of humanity by comparison.

          1. Then don’t go there, Nando.

            1. Vegas has one more thing going for it. Many smug progressive creeps disdain its existence.

    4. How can a video affect the environment?

  9. BBC Sport’s chief F1 writer Andrew Benson
    “This weekend’s Malaysian Grand Prix is the first time Formula 1 drivers have raced at Sepang since the death of MotoGP rider Marco Simoncelli in a crash at the track last year. The Italian has been much on people’s minds. Ferrari drivers Fernando Alonso and Felipe Massa went down to the crash scene, Turn 11, and posed for a photograph, holding up a pit board that read ‘Sic (short for Simoncelli) sempre con noi’, which means ‘Forever with us’, and included Ferrari’s Prancing Horse emblem, an Italian flag, and his racing number, 58. And Red Bull’s Mark Webber also spoke movingly of a man he called ‘an incredible warrior’, saying he would be thinking of him as he drove around that corner for the first time on Friday morning.”

    1. Isn’t there a 2-character limit?

  10. The whole forum is well worth perusing.

    Wow a whole forum of bad solutions for a fake problem?

    I think I’ll pass.

  11. Cop gets drunk and steals a party bus.

    http://www.sandiego6.com/news/…..76396.html

    1. Ooh, ooh, I’ve got this one!

      AND NOTHING ELSE HAPPENED. Amirite?

  12. All power to the Soviets

  13. Is the Romney campaign like an Etch A Sketch?

    1. Did the MSM come up with the most uninteresting snark ever?

    2. My attention literally fades every time I come across an explanation for this story. I’ve seem some thread post numbers up on sites that are ridiculous given the no there there quality of etchysketchgate; can’t fathom why anyone would shit themselves over this.

  14. Another funny cop story (I’m liking these better than the nut kicks):

    http://www.witn.com/news/headl…..ml?ref=816

  15. From today’s Washington Post:

    ? Rep. Ron Paul (R-Texas), a GOP presidential hopeful, paid more than $300,000 in salaries or fees to his daughter, brother, grandson, daughter’s mother-in-law, granddaughter and grandson-in-law, the report said. (Paul spokesman Jesse Benton told the Times: “Any implication that there is anything inappropriate is wildly off base.”)

    1. Three hundred grand to six people over how many years? So, what’s the scandal, are they bitching about him being cheap?

      -jcr

      1. So. Fucking. What. Max.

      2. MINIMUM WAGE!!11!!!!!

      3. Three hundred grand to six people over how many years?

        Pfft, amateur.

    2. salaries or fees from where? if it wasn’t from his congressional office budget or other taxpayer money, why would we care?

  16. That paint color is AWESOME and those rims are really nice.. The front of it… isn’t so good…The car is still more attractive then the 3 series.

  17. Nothing was more to be desired than that every practicable obstacle should be opposed to cabal, intrigue, and corruption. These most deadly adversaries of republican government might naturally have been expected to make their approaches from more than one quarter, but chiefly from the desire in foreign powers to gain an improper ascendant in our councils. How could they better gratify this, than by raising a creature of their own to the chief magistracy of the Union?

  18. That paint color is AWESOME and those rims are really nice.. The front of it… isn’t so good…The car is still more attractive then the 3 series.

  19. “What to do about income inequality”

    How about we quit supporting the kind of demagogues who try to inflame the sin of envy in their fellow man?

    Love,

    The Messiah

    1. TEN: ‘You shall not covet your neighbor’s house; you shall not covet your neighbor’s wife, nor his male servant, nor his female servant, nor his ox, nor his donkey, nor anything that is your neighbor’s.’

      1. Coveting your neighbor’s income isn’t on that list.

  20. The natives, or natural-born citizens, are those born in the country, of parents who are citizens. As the society can not exist and perpetuate itself otherwise than by the children of the citizens, those children naturally follow the condition of their fathers, and succeed to all their rights. The society is supposed to desire this, in consequence of what it owes to its own preservation; and it is presumed, as a matter of course, that each citizen, on entering into society, reserves to his children the right of becoming members of it. The country of the fathers is therefore that of the children.

  21. John McCain, two citizen parents, born else where.

    NOT QUALIFIED! VOTES EQUAL NULL

    Barack Obama, born in the US, one citizen parent, one British subject parent, dual citizenship according to the 1963 treaty granting Kenyan independence extending citizenship to the children of Kenyan citizens born in foreign lands.

    SO NOT QUALIFIED! VOTES EQUAL NULL

    Bob Barr, born in the US, both parents citizens. No outstanding claims of dual citizenship.

    QUALIFIED! Received 523686

    Bob Barr, President of the United States!

    Wait, we have a correction! Ralf Nader, born in the US, to immigrant parents. Arrived in the US in the 1920’s, citizens at the time of Nader’s birth.

    QUALIFIED! Received 463,655 votes.

    So close! So close that Nader receives more Electoral College votes.

    As it stands, Ralf Nader is the President of the United States!

    1. Recount! Taking this all the way to SCOTUS if we have too.

      1. That’s my line. You’re the lefty, remember?

        1. Speaking of Alex Jones. Here’s Lyndon LaRouche on ALex Jone;s show.

          http://www.youtube.com/watch?f…..QWIKFy-uQ#!

  22. There are too many high-earning lawyers, doctors, athletes, financial analysts, entertainers, entrepreneurs, small-business owners, scientists, and engineers for this to be so.

    I think this has to be emphasized.

    One issue with capping executive compensation is that you can make $500,000 a year owning and operating a couple of Dunkin’ Donuts franchises.

    Do people seriously propose that running a global business enterprise should command no market premium over running what amounts to a couple of coffee carts?

    1. Even the there was a law limiting income to $500 000, the usual suspects will not suffer, people like Buffet and others close to politicians will easily find ways to make more money and mask it in the thousands of pages of laws and its exemptions.

      1. Buffett has an income less than that now.

        Ellison was paid $1 to be CEO of Oracle for a number of years. Not sure how that wasnt a violation of minimum wage laws, but whatever.

      2. Suppose someone can make $600,000. But by law they can only make $500,000. Therefore the law has made them poorer. This is not a government that empowers the citizen to reach full potential. This is a society of mediocrity.

  23. I think THIS has to be emphasized.

    There you go.

  24. “Any indictment of capitalism worth its salt has to show not just that the rich are getting richer, but that they do so by making the poor poorer.”

    That’s certainly not obvious.

    If someone proposed a deal to you where they do 1% of the work but make 99% of the profit, you might tell him “forget you.” If that makes any sense to you then you can see how massive inequality even accompanied by overall rising incomes could still be seen as unfair and a problem.

    1. Of course when somebody asks somebody else to do 99% of the work and the other does so willingly, the government must stop this, people must not be allowed to determine how much they are willing to work for, that is unfair.

    2. If someone proposed a deal to you where they do 1% of the work but make 99% of the profit, you might tell him “forget you.”

      I might, but I might not.

      If someone comes to me and says, “I have a patent for transparent aluminum (or some other Maguffin) and I want to partner with you. I don’t want to have anything to do with the day-to-day business. I’ll give you 1% of the gross to run it for me,” I’d have to consider that.

      I know it burns progressive ass to hear this, but shuffling paper around and mowing the lawn and sweeping the floors doesn’t actually create very much of the value of an enterprise.

      Most elements of a business enterprise have very little value in isolation; the value is an emergent property of arranging those elements in a productive way.

      1. I think it’s also important to note that if I rejected Mr. X’s transparent aluminum offer, it would only be because I thought I could make more money elsewhere.

        The offer can only be evaluated as unfair in the context of competing and better offers.

        Considered in isolation, it’s perfectly fair. I know absolutely dick about metallurgy and will never invent transparent aluminum, ever. That means that if I make money off of it, even if it’s only 1%, I’m getting more than I would have gotten if left to my own devices without Mr. X. So how could that be unfair?

        1. “I think it’s also important to note that if I rejected Mr. X’s transparent aluminum offer, it would only be because I thought I could make more money elsewhere.”

          I don’t know what to say, then yes, you can’t undestand how many people would be concerned about equality even with overall rises.

          A lot of people would reject that offer because it struck them as grossly unfair. It’s likely a fundamental thing you either see or don’t.

          By the way, can you send me your contact information? I have a great way for both of us to make money by you stuffing envelopes. It has to go through me, I’ll make nearly all the money, but you will be sure to get some more money than you started with. It only takes an hour a day and you can do it anytime, so you can’t worry about “making more money elsewhere” (you can easily do this in addition to whatever else you choose).

          1. I see no problem with your hypothetical offer. That isn’t unfair either. I can make a few extra bucks, or if the hour is worth more than that wage, I’ll pass.

            I don’t understand why workers should necessarily command a higher percentage of the profit of a company than the market dictates. And, if they should, what is that percentage and how is it determined?

            1. Post your contact info and i’ll send the envelopes asap!

          2. A lot of people would reject that offer because it struck them as grossly unfair. It’s likely a fundamental thing you either see or don’t.

            Not all work is of equal value. So you can’t say “I’m doing 99% of” the total work without weighting the different work for its contributory value. And how do you do that without price?

            The work of the guy who sweeps the floors at a semiconductor plant is worth, quite honestly, shit.
            He may feel like he’s “working hard” but he’s contributing almost nothing to the total value of the enterprise. He’s actually overpaid by the market in a “fundamental” sense. The lifestyle the “fundamental” value of his labor should earn him is no higher than what he could have cribbed together in the Paleolithic. (Sorry if I summoned WI there.) Everything above that is a gift from the market, from capital, and from organization.

            1. Let’s put it this way: what I do will take me virtually no time and requires little skill, what you will do will take much time. Or better put, if you had the connection to those who would pay for the resulting stuffed enevelopes then you could cut me out totally, but me with my connection without your work, there’d be nothing.

              But, you’d be sure to be slightly better off, so I’m expecting your contact info so you can get stuffing.

              1. Almost anybody can stuff envelopes. Are you saying that it’s “unfair” that envelope stuffers aren’t paid a million dollars a year for that work?

                1. Not at all. In real life the person who supplies the envelopes likely does a lot of work and takes a lot of risk. I was just making up an example of a case where someone only does 1% of the work (in effort or value, if it makes it work better) and another does 99%. My thing was: would it be crazy for a person to reject that split even though both parties would be better off (one very slightly, one very much)? I don’t think most people would find that crazy.

                  1. And what about the work the dude doing 1% of the work had to do to raise the capital to rest on his laurels and pay the other guy a worthwhile salary to do 99% of the work?

                    Sure, many people inherited that money or their hot mother slept with an admissions counselor at Harvard to get them an easy life track. But many (or most?) entrepreneurs didn’t, so I choose not to overgeneralize without a factual basis.

                    Look, I’m all for more equality of opportunity. However, people at different points in their career, with different educational and experiential paths, doing different work with different market values should make different salaries, drastically different even. Higher salary becomes an incentive for lower salary workers and better education.

                    Also, harsh as it is to say, if being a janitor is the best you can do, it’s likely your own decisions contributed to that ceiling.

          3. And that goes for me too. I’m also overpaid.

            Luckily, I regard exchange values as more valid than “fundamental” values, so it’s all good.

    3. I don’t look at what percent of the profit I’m getting. I look at the salary relative to my needs including how much the job takes out of me. If I do think the salary is unfair in any way I move on as soon as practicable.

      For a one-time deal the percentage of profit may be more relevant, but I also have to factor in who is taking more risk. It’s also important not to look at the deal in a vacuum: getting only 1% of the profit this time may lead to bigger things in the future.

      Selfish, I know.

      1. ” don’t look at what percent of the profit I’m getting. I look at the salary relative to my needs including how much the job takes out of me.”

        It’s funny how this kind of proves the general Marxist point that most people are stuck in terrible deals that vastly enrich someone with better bargaining postion than them just so they can “meet their needs.”

        If you were a wealthy man, lounging at your polo club, and another equally wealthy man approached you with a deal where you did 99% of the effort and he made 99% of the profit you would tell him to get bent. But everyday people make that deal when they have to pay the bills.

        1. So what?

          That reflects the actual exchange value of the payment involved.

          $50,000 is more valuable to a person with $0 than a person with eleventy billion dollars.

          You’re basically arguing that any deal is unfair if anyone anywhere would reject it in favor of leisure, if they were already secure.

          And that’s silly.

          If I had a job making $100,000 a year working 40 hours a week, and you came along and offered me a job paying $50,000 a year for 20 hours a week, the second job offer is just as “fair” as the one I’ve already got. But I might reject it, because I’m already working full time and don’t want a second job – I would prefer to not lose my leisure time if I’m already secure.

          That doesn’t make the person offering me the 2nd job an “exploiter”.

          And they aren’t an exploiter if they offer the same job to somebody else, either.

          1. What it does illustrate is the unequal bargaining power. The only reason you’d even consider such a deal is you need it more, because you need certain things. People without those needs wouldn’t take it. So you have whole groups of people taking deals that other entire groups would laugh at.

            1. You are really close to grasping the entire concept of pricing.

            2. And how do you know the currently wealthy didn’t put themselves through college doing back-breaking construction work or minimum wage dishwashing? The idea of worker-employer exploitation in a voluntary environment is a folly that the Left get trapped in, like many of their other forms of victimology. Telling the poor to feeling victimized for accepting a voluntary agreement (that one can exit at any time a better opportunity comes around) only encourages resentment and resignation to one’s poverty, not progress.

              In the 1950s, Japan was an “exploited” manufacturing economy. In the 1970s, it was South Korea. In the 1990s it was Taiwan. Now it’s China. And yet despite the horrid first world exploitation, through the hard work of their people and technological advancement, these economies have drastically changed to first world or second world-in-transition economies.

        2. I really don’t understand the leftist impulse to conflate effort and value. They are oftentimes quite exclusive.

        3. There’s nothing “Marxist” about the fact that my leverage in any deal is proportional to the value I bring to it.

          The way to get myself a fairer deal is to increase my value. Consider Fluffy’s example above about the “transparent aluminum” factory. Since I don’t know anything about running such a place obviously you wouldn’t offer me 50% of your profits to do it, would you?

          If your answer is “yes” don’t consider going into business for yourself.

          1. Your leverage is not just a function of your value you bring, but your need. That’s what the example is all about. The rich guy at the polog club can reject the deal as unfair because he doesn’t need the 1% to pay his bills, the poor guy not so much.

            1. True, but “unfair” is purely subjective. It would not be unfair to me to accept the deal, and I don’t give a fuck if the rich guy would take it or not. I’m not being exploited because somebody else doesn’t need the deal.

              1. I’m not sure unfair is subjective or not, but I would say if both sides were happy about the deal and would make it regardless of their need it would be quite the prudish nanny to insist otherwise.

            2. I need 100 billion dollars. Every opportunity I agree to involves massive unequal bargaining power. It’s just not fair.

            3. To get back to your original point, how did the rich guy get richer by making me poorer? If he fulfilled his end of the deal by paying me the agreed amount, he made me richer. Perhaps not country club material, but better off nonetheless.

              Ah, but you still think it “unfair” because I didn’t get just as rich as the guy who had the idea and risked the capital? Based on what, your feelings of what I “should” get?

              1. “how did the rich guy get richer by making me poorer”

                I didn’t it. I said you’d be better off. My point is the deal is unfair due to the distrubtion of effort/value and rewards, regardless of whether both are made better.

                1. Put it this way: if you did an experiment in which you chose two people at random to do a task, and they did equal parts of the task, and you then gave one of them a reward worth ten times the other, you don’t think the one who got the smaller reward would be upset? Of course he would (they’ve actually done these studies in behavioral economics). Would their upsetness seem strange and inexplicable to you? I don’t think so.

                  And yet, both were left better off. But people don’t use just that to judge the fairness of these kinds of things. That’s my entire point.

                  1. Put it this way: if you did an experiment in which you chose two people at random to do a task, and they did equal parts of the task, and you then gave one of them a reward worth ten times the other, you don’t think the one who got the smaller reward would be upset?

                    Where does this happen?

    4. Well, MNG, if I’m getting a lot richer, and you’re only getting a little richer, I fail to see how you are harmed.

      Regardless of which of us is doing more work.

  25. “We would do well to look to OWS for inspiration here.”

    That’s too funny.

  26. Not sure I agree with Grusky. Rent seeking no doubt plays a part, but in a truly competitive labor market the participants with the least valuable skills (or “no skills”) are going to be compensated as little as possible. In the absence of redistributive tax policy and/or universal or means-tested entitlement programs, the least “valuable” members of society are going to be living at subsistence level.

    Some folks are okay with that. Some folks aren’t. For those that aren’t, the question becomes, “What is the least economically damaging way in which to tweak the market such that the least valuable workers enjoy a standard of living above mere subsistence.”

    Given this is a goal we (as a nation) seem to want to pursue, the current strategies leave much to be desired.

  27. ….charity? (a non coerced private transaction)

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