Income inequality is no more than a figleaf for stock class envy and leveling unless and until it’s established as harmful to the common weal in and of itself, upon arrival. If the American “poor” are doing comparatively well in absolute terms, especially in global terms, who cares if we have more millionaires and billionaires?
An elementary query, on-topic: if the bottom rung average an income of 5 compared with the top rung averaging 25, are those on the bottom rung better off or worse off if instead they average an income of 10 and the top rung 100? Dread income inequality is twice as bad in the latter instance, yet the poor have twice as much.
That we should spend far less on the bottom quintile or we should try to raise the returns on work and create more abundance for the second, third and fourth quintiles?
Gramm's view that the middle class is suffering because of too many income taxes and transfers to the bottom quintile is just flat out empirically false. If that might have seemed true in the late 70s and early 80s, it is not even approximately true now.
Thanks again. I'll sign off of this exchange by trying to answer your question.
The policy implication of the observations by Gramm that I discussed in my post is that we should spend less on the bottom quintile. Doing so would not preclude taking measures to "create abundance" for quintiles 2-4 that you regard as more important. It's not an "either-or," regardless of how Gramm might view these other measures.
Well we can debate the accounting of health spending.
But the broader problem with Gramms argument is that it focuses entirely on the poor, obscuring the fact that the fortunes of the American middle class.
The GOP was the majority party in America for most of Gramms career. But it isn't now having lost the popular vote in 7/8 elections. Why?
The policies championed by people like Phil Gramm don't actually benefit most Americans!
You may have identified a problem with Gramm, but I don't think you have identified one with his argument that the government massively overstates the income gap between the top quintile and the bottom one (or two). And Gramm's argument on that point has public policy implications.
Contra Gramm....a conservative economic policy should be far less concerned with the supposed disincentives to work and much more concerned with the stagnating or even declining real incomes and rising cost of living for many people who do work!!!
Not quite. Noah argues convincingly the value of health transfers is greatly overstated because health care in the US is very very expensive relative to the rest of the world. If say NY medicaid is paying 3X for a labor and delivery service that would cost X in France, is the poorer American really 3X better off in marginal terms? Of course not.
And Gramm is correct that the poor are doing a bit better relative to middle class, due to transfers that he opposed.
But what does this say about the declining value of labor income for many middle class workers?
Nothing good for the economic policies Gramm champions which are intended to benefit the rich and do not in fact benefit non wealthy Americans.
Not quite. Noah argues convincingly the value of health transfers is greatly overstated because health care in the US is very very expensive relative to the rest of the world. If say NY medicaid is paying 3X for a labor and delivery service that would cost X in France, is the poorer American really 3X better off in marginal terms? Of course not.
And Gramm is correct that the poor are doing a bit better relative to middle class, due to transfers that he opposed.
But what does this say about the declining value of labor income for many middle class workers?
Nothing good for the economic policies Gramm champions which are intended to benefit the rich and do not in fact benefit non wealthy Americans.
Income inequality is no more than a figleaf for stock class envy and leveling unless and until it’s established as harmful to the common weal in and of itself, upon arrival. If the American “poor” are doing comparatively well in absolute terms, especially in global terms, who cares if we have more millionaires and billionaires?
An elementary query, on-topic: if the bottom rung average an income of 5 compared with the top rung averaging 25, are those on the bottom rung better off or worse off if instead they average an income of 10 and the top rung 100? Dread income inequality is twice as bad in the latter instance, yet the poor have twice as much.
Right. What are the policy implications though?
That we should spend far less on the bottom quintile or we should try to raise the returns on work and create more abundance for the second, third and fourth quintiles?
Gramm's view that the middle class is suffering because of too many income taxes and transfers to the bottom quintile is just flat out empirically false. If that might have seemed true in the late 70s and early 80s, it is not even approximately true now.
Thanks again. I'll sign off of this exchange by trying to answer your question.
The policy implication of the observations by Gramm that I discussed in my post is that we should spend less on the bottom quintile. Doing so would not preclude taking measures to "create abundance" for quintiles 2-4 that you regard as more important. It's not an "either-or," regardless of how Gramm might view these other measures.
Well we can debate the accounting of health spending.
But the broader problem with Gramms argument is that it focuses entirely on the poor, obscuring the fact that the fortunes of the American middle class.
The GOP was the majority party in America for most of Gramms career. But it isn't now having lost the popular vote in 7/8 elections. Why?
The policies championed by people like Phil Gramm don't actually benefit most Americans!
Thanks for your comments, Mr. Pete.
You may have identified a problem with Gramm, but I don't think you have identified one with his argument that the government massively overstates the income gap between the top quintile and the bottom one (or two). And Gramm's argument on that point has public policy implications.
Contra Gramm....a conservative economic policy should be far less concerned with the supposed disincentives to work and much more concerned with the stagnating or even declining real incomes and rising cost of living for many people who do work!!!
Not quite. Noah argues convincingly the value of health transfers is greatly overstated because health care in the US is very very expensive relative to the rest of the world. If say NY medicaid is paying 3X for a labor and delivery service that would cost X in France, is the poorer American really 3X better off in marginal terms? Of course not.
And Gramm is correct that the poor are doing a bit better relative to middle class, due to transfers that he opposed.
But what does this say about the declining value of labor income for many middle class workers?
Nothing good for the economic policies Gramm champions which are intended to benefit the rich and do not in fact benefit non wealthy Americans.
I don't find Noah's argument convincing as an analysis of income inequality between the top and bottom quintiles in the U.S.
I use a medication that costs around $500 in the U.S. and around $30 in France. With Medicaid Part D, I can get the med here for around $100.
Unless I can get the med in France, the economic benefit to me of the federal government's largesse is +$400, not zero (or -$70.)
Not quite. Noah argues convincingly the value of health transfers is greatly overstated because health care in the US is very very expensive relative to the rest of the world. If say NY medicaid is paying 3X for a labor and delivery service that would cost X in France, is the poorer American really 3X better off in marginal terms? Of course not.
And Gramm is correct that the poor are doing a bit better relative to middle class, due to transfers that he opposed.
But what does this say about the declining value of labor income for many middle class workers?
Nothing good for the economic policies Gramm champions which are intended to benefit the rich and do not in fact benefit non wealthy Americans.