Income inequality

Stossel: Inequality Myths

Contrary to what most of the media says, the poor are getting richer and income mobility is high.

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Politicians and reporters often rail about "the rich getting richer and the poor getting poorer."

But as John Stossel explains, it's not true.

In fact, the incomes of poor and middle-income Americans are up 32 percent since the government began keeping track several decades ago.

Yes, that increase is adjusted for inflation.

Another misleading claim, says Stossel, is the idea that the U.S. "no longer has economic mobility."

But a paper in The Quarterly Journal of Economics found that most people born to the richest fifth of Americans fall out of that bracket within 20 years (Table 2). Likewise, most born to the poorest fifth climb to a higher quintile. Some climb all the way to the top.

Another claim is that inequality itself is a huge problem.

New York City Mayor Bill de Blasio warns: "There's inequality in this country right now that is threatening to tear us apart."

Stossel says that it might tear us apart—but only if people come to believe that all inequality is evil.

But it isn't, he says. It's just part of life. Some people are better singers than others. The best athletes are just physically different.

Society doesn't try to equalize those things—or many others—for good reason.

Former investment banker Carol Roth tell Stossel, "I have two kidneys. There are people out there who need one, don't have one that functions. Should the government be able to take my kidney because somebody else needs it?"

"There's inequality in everything," she adds. "There's inequality in free time. There's inequality in parents. I don't have any parents or grandparents. Life is unfair…unfair is a feature. It's not a bug."

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The views expressed in this video are solely those of John Stossel; his independent production company, Stossel Productions; and the people he interviews. The claims and opinions set forth in the video and accompanying text are not necessarily those of Reason.

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24 responses to “Stossel: Inequality Myths

  1. I am doing online google work at home and earn 8500$ every month at home easily just spend 2 to 4 hours daily on internet without any investment.if you i want to introduce its to my all friend,s to get start online working and earn money at home without any investment.if you interested look at this site…..
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  2. The equality solution, succinctly explained back in 1979.

  3. Even the Chron finally dropped Reich as a columnist. Every Sunday he wrote a column whining that the rich are getting richer more quickly than the poor are getting richer.

    1. Every Sunday he wrote a column whining that the b>rich are getting richer more quickly than the poor are getting richer.

      I wonder why Reich thinks that is the problem.

      Of course, this is the same Robert Reich who said that the Trump presidency must be annulled.

      1. Yes, it is. At least he wasn’t nearly as stupid as Krugman:

        “The economic fallout of a Donald Trump presidency will probably be severe and widespread enough to plunge the world into recession, New York Times columnist Paul Krugman warned in a New York Times opinion piece published early Wednesday.
        Calling Trump the “mother of all adverse effects,” the Nobel Prize-winning economist predicted that the GOP nominee’s administration could quickly undo the progress that the markets around the world have made in the eight years since the financial crisis.”
        https://www.politico.com/story/2016/11/krugman-trump-global-recession-2016-231055

  4. The so-called wealth equality gap would be concerning if it was a gap between the top 1% and the other 99%. That is revolution-making ala Czarist Russia or most of the European revolts around 1848. The U.S. may have wide disparity between the richest and poorest, but plenty of well-off folks in between – a bell curve and not a ski jump.

    1. I wonder if, during the imbecilic “occupy” movement, the 2% were saying: “Wow. We’re getting off easy.”

  5. “But it isn’t, he says. It’s just part of life.”

    Not all inequality is part of life. Some inequality stems from our economic system. This is obvious if you look at the world’s wealthiest people. A billionaire is not a thousand times smarter than a millionaire nor does a billionaire work a thousand times harder than a millionaire, have a thousand times the number of kidneys, a thousand times the height, or a thousand times sweeter a singing voice. Nature distributes her gifts to us with an admirable even handedness.

    1. How is everything you describe not part of life? Life isn’t fair. Every human society ever has been unequal. Attempts to change that have been utter disasters. Now maybe no one has come up with the right way to change it yet, but I think we have enough evidence now to be very skeptical of anyone claiming to have such a plan.

      1. ” Every human society ever has been unequal. ”

        I’d go even further than you. Every human is unequal. We are all different from each other. Take height for example. According to Guinness Book of world’s records, the shortest person is 57 cms and the tallest is 272 cms. Everyone else is somewhere in between. I don’t know anyone suggesting we should take steps to change this. It seems a straw man argument to me.

        “but I think we have enough evidence now to be very skeptical of anyone claiming to have such a plan.”

        There is no such plan. It is a straw man argument. You and Stossel can find something else to wring your hands over.

        Nature seems to be content that the tallest are some 5 times taller than the shortest, and I would venture to say that the smartest are about 5 times as intelligent as the stupidest. And when it comes to endowment of ears, eyes, lungs, kidneys, hearts, livers etc, we’re even more equally blessed.

    2. But maybe, just maybe, he’s 1000 times better at making money? Seeing the value opportunity and taking the risk?

      1. “he’s 1000 times better at making money?”

        He’s not making money. Money is making money. This is the magic of compound interest, a difficult concept to grasp, I grant you.

        1. And those who are smart enough to save and invest their money to avail themselves of the compounding effect did earn every bit of that wealth.

          You certainly cannot prove that anyone else has any legitimate claim on it.

          1. “And those who are smart enough to save and invest their money”

            It works for the stupid as well. The idea that only the smart can benefit from compound interest is ludicrous.

            1. I said smart ENOUGH to save and invest their money.
              I didn’t say brilliance was required.

              And by the way investment involves risk. The big money is not made purely on the effect of compound interest. You won’t get rich in a low interest rate passbook savings account.

              The people who got rich by investing early in Google, Apple or Amazon stock didn’t make that money due to compound interest.

              1. “The people who got rich by investing early in Google, Apple or Amazon stock didn’t make that money due to compound interest.”

                There’s all sorts of ways to get rich. Some even actually do it through hard work! My point is that hard work, intelligence etc need not separate the millionaire from the billionaire. The billionaire can be just as stupid and slothful as the rest of us, it’s the money that brings money. I would have thought this was a well understood fact of economic life.

                1. Having the discipline to save and invest and then selecting WHAT to invest in and how long to hold vs sell and reinvest elsewhere IS work.

                  Your remarks indicate you don’t actually understand what economic “facts of life” are.

  6. Lots of famous progressives are fond of describing taxes as the price of civilization. I submit that economic inequality is another inescapable price of civilization, at least a generally prosperous one.

  7. Stosell likes to remind people that he has never had an actual real job, and the only people he really knows are ‘investment bankers’, those paragons of free markets. With only a little bit of help from their friends in government…

    As for the ‘paper’ cited. Garbage. Using federal tax data as a stand-in for actual income and wealth is delusional, since, especially as one’s wealth increases, reported income on tax forms often approaches zero.
    There are quite a few people who have never worked a day in their lives that easily spend over a $100,000 every year. Their ‘income’ according to federal returns, is nil. Yet somehow they manage to live a substantial lifestyle. Funny that.

    1. “There are quite a few people who have never worked a day in their lives that easily spend over a $100,000 every year. Their ‘income’ according to federal returns, is nil. Yet somehow they manage to live a substantial lifestyle.”

      Citation? Just propagating liberal myths are you? What’s the number? Well?

      https://www.bankrate.com/financing/wealth/what-does-1-percent-pay-in-taxes/

  8. Good stuff Stossel.

  9. More lame propaganda. With the ease of obtaining information these days, nobody believes this drivel anymore than Motley Fool predictions.

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