This week, Reuters is running an excellent series on income inequality and the Great Recession. Check it out here.
I've contributed a commentary piece titled, "Examine inequality's causes before prescribing solutions," which looks at the ways in which government promotes geographical inequality and stacks the deck against younger, poorer people in favor of older, wealther people. Some snippets:
Fear and loathing of income inequality is both totally understandable and ultimately misplaced.
It's understandable because everywhere around us it seems as if top income earners ? those latter-day kulaks vilified as the "1 Percent" by the Occupy crowd and populist politicians ? are gaining while the rest of us seem barely able to hang on to a lower-middle-class standard of living.
It's misplaced because it glosses over strong evidence that the ability to rise above your starting place ? the American Dream, by most accounts ? is better than it was 40 years ago….
…generational inequality…is also goosed by government policy. The Pew Research Center finds that in 1984, households headed by someone 65 years or older possessed on average10 times the wealth of a household led by someone under 35. By 2010 that gap had widened to 22 times. Part of that disparity is the result of payroll taxes that take about 12.4 percent (half from the worker, half from the employer) of every dollar of earned income up to $110,000 to pay for Social Security (for the past two years, the worker's share of Social Security taxes has been reduced by 2 percentage points, a break that will expire at year's end). Another 2.9 percent of all wages ? again split between employee and employer ? goes to Medicare.
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