Income Inequality Myths Of Left Exposed Once Again

IBD Editorials ^ | March 8, 2012

[Kaslin]

Economy: The president's strategy this election year is to divide the supposedly battered 99% from the evil, super-rich 1% doing the battering. But reports of America's income inequality are greatly exaggerated.

That financial "inequality" gets treated as a serious issue is proof of an epidemic of economic illiteracy, since the rich do the job-generating in our economy. Now, Manhattan Institute senior fellow Diana Furchtgott-Roth has just added some essential new analysis exposing class-warfare fallacies.

Examining Labor Department data, "The Myth of Increasing Income Inequality," published this week, show "that inequality as measured by per-capita spending is no greater today than in it was in the 1980s."

Among the neglected or ignored factors she addresses are the role food stamps, Medicaid and housing allowances play in the statistics; the increase in both high-income two-earner households and low-income one-person households; and more small businesses shifting from corporate to individual tax schedules since the 1986 tax reform.

For instance, a higher percentage of low-income Americans — 26% in the poorest fifth of households and 31% in the second-lowest fifth — actually own their homes free and clear of mortgage debt than upper-income taxpayers. "In fact, in the top quintile, 18% of households own their homes debt-free, the smallest share of any quintile — a counterintuitive result," Furchtgott-Roth points out.

One reason is that many nonworking elderly, with their meager retirement incomes but substantial assets like stocks and property, get lumped in with the "poor" households. Also categorized as poor are students and recent college graduates whose degrees ensure them a higher income a few years out.

There are also fewer members of lower-income households, because the elderly are living longer, divorce has increased, and marriage takes place later than in previous decades.

[JimSEA]

There is always the human tendency for those on the bottom to resent those who are even marginally more successful and to try and bring them down. See Cambodia as a recent extreme example.

[Don Corleone]

figures lie and liars figure and politicians...well they just figure to lie...all the time.

[castlebrew]

bump for the Stack of Stuff...

[griswold3]

Liberty And The Overcoming of Capitalism
The Brussels Journal - “The Voice of Conservatism in Europe”
2012-02-23
by George Handlery

The pledge to eliminate capitalism sells. The goal‘s equivalent is to serve a steak that has never been part of a cow.

...Textbooks tell us that the things we create combine capital, labor, resources, and ideas that reflect knowledge. Capital and the rest of the factors are interrelated. The labor to create a better obsidian knife could not be invested into the rock unless its maker could be sustained while absented from hunting. For instance, with accumulated “capital” in the form of let us say dried meat and corn...

As we proceed either to discover the inherent evils of capitalism, or to declare faults to be non-existent –the latter attempt is a trap- we become cognizant of an ignored point. Capitalism, as in “evil” or in “boon to mankind” appears to be a recent phenomenon. In fact, while the term is “new”, what it describes is ancient. Capitalism is only new as a phrase used to name something we have noticed. Capital, which is a hoarded factor of production, has always been around...

By its very nature, capital is unequally divided. Here a fundamental law is operating. This makes salvation schemes that promise liberation through equality into a promise to spit against the wind and to keep your face dry. Such programs have in common that, after the liquidation of those that are held responsible for inequality, they promise a new start. The equivalent is to rewind the story to where Adam, Eve, the serpent and the apple had interacted. (PC requires that the apple not be green or red.) To make the return to original equality through redistribution plausible, we need to forget the implications of the privileges of the re-allocators. After this concession, even if we assume that the leveling achieves its goal, it is a fallacy to assume that the condition will be a stable. In reality, the new recording will hardly result in a new story without the machinations of the serpent.

Even Marx assumed that equality would exist only in that each will get according to his needs and independently of his contribution. Even centuries ago he did not insinuate that all will have the same need. Nor could he foresee that free hamburgers will cause an epidemic of obesity as availability creates its own demand. Nowadays one hears about well meaning folk that control the kid’s lunch boxes. Generalizing from that, we discover why equality and control are interrelated.

Equalitarian projects, practiced by an entire society and not limited to a “club” of the like-minded, tend to underestimate the problems of production...

http://www.brusselsjournal.com/node/4911