Thomas Sowell Is Right, As Usual
While covering the debate last evening, Jay Nordlinger tweeted, “T. Sowell: Only the comfortably off care about income inequality. The poor just want to be less poor — no matter what is happening ‘above.’”
The truth of this can easily be demonstrated with a thought experiment. Imagine that an economist comes up with a mechanism that, if Congress would pass the necessary legislation and the president sign it, would have the effect of doubling everyone’s real, take-home income. But there’s a catch. While the mechanism would double the incomes of everyone earning less than $100,000, it would triple the incomes of those earning more than $100,000, and quintuple the spendable incomes of those earning over $1,000,000.
Thus, the high school teacher taking home $50,000 would see his disposable income rise to $100,000. But the mid-level corporate manager earning $150,000 would now have $450,000 to spend, and the partner of a Wall Street law firm would see his $2 million annual income soar to $10 million. The spread between the law firm partner and the high school teacher would go from 40-to-1 to 100-to-1
In other words, income inequality would go through the roof.
Would liberal congress members vote against such a bill? They would certainly be tempted to, at least based on their rhetoric that income inequality is a pernicious evil that must be reduced. But how would they explain their vote to a constituent who’s a high school teacher taking home that $50,000, and who has a son who needs serious orthodontia not covered by insurance, is driving a 9-year-old car, and whose 40-year-old roof needs to replaced? They couldn’t, and unless they were bent on committing political suicide, they wouldn’t try.
Of course, this is exactly what happens in a rapidly expanding economy, as growth lifts all the boats. But, ineluctably, it will lift the boats of the more affluent higher, and the most affluent the highest of all. The only way to prevent that is to limit growth. And that is what liberal economic policies do: keeping people at the bottom poor.