January 24

M.D. Harmon: Cut rhetoric, ease regulation, create jobs to fix income inequality

The richest may have far more than the rest, but many high earners create countless jobs.

As my dog would say if she could talk, “You think I have a short attention span, but that’s not true, because OH LOOK A SQUIRREL!”

It’s harmless when a canine futilely watches Scurius carolinensis scurry up a tree, but our politicians know that people, too, can be distracted if they start to focus on events or issues that discomfort their leaders.

So, if Americans dare ask about Obamacare’s costly blunders, or how four Americans died at Benghazi or why the Internal Revenue Service denied or delayed dozens of conservative groups’ applications just before the 2012 election, the official response is to release a furry rodent and let the coverage chase it instead.

The current example is “income inequality.”

That income growth has stalled among middle- and lower-class sectors is no secret, but few seem to know that the disparity President Obama recently cited has grown significantly since he became president – as has joblessness.

As The Christian Science Monitor reported Jan. 11, “The economy still has fewer workers than it did in 2007, even though the working-age population has grown by about 15 million people. One result: Where some 63 percent of all working-age Americans had jobs in 2007, the share with jobs is now just 58.6 percent.”

Still, according to Emmanuel Saez, a Berkeley professor, during the post-recession years of 2009-2012 the most prosperous Americans saw their incomes grow far faster than the rest of us, creating a disparity greater even than during the good economic years of 2002-2007.

Some economists attribute this to a boom in stock values undergirded by the monetary policies of the Federal Reserve, as the top 10 percent of earners reap the most profit from stocks. Those policies have also depressed interest rates on savings, which hurts the middle class and retirees.

But having jobs counts the most.

As analyst Kevin Williamson wrote on National Review Online Monday, “Rich America is working America: Wealthy households contain on average more than four times as many full-time workers as do poor households, and, surprisingly, inherited wealth constitutes a smaller share of their assets than it does for middle-class and poor households.”

So, working makes a big difference – and so does marriage.

As Williamson notes, “Not surprisingly, 78.4 percent of those highest-income families were married couples, as opposed to 17 percent for the lowest-income group. What this all means in brief is that the highest-income families are composed almost exclusively of two-earner households, the overwhelming majority of them married couples.”

Stirring the pot this week was the British aid agency Oxfam, which said “the world’s 85 richest people” have as much wealth as the poorest half of the world’s population.

But few accounts mention how many of the world’s poor suffer under grinding authoritarian or totalitarian regimes without free economies.

Nor do they mention the millions of jobs high earners produce. Just one of them, Microsoft’s Bill Gates, is estimated to have created nearly 1.5 million jobs though enterprises he helped develop.

Bruce S. Thornton, a research fellow at Stanford’s Hoover Institution, writes, “We do not hear Obama and the Democrats decrying the bloated incomes of progressive actors, television talk-show hosts, rap moguls, or sports stars. Their demonization of Wall Street doesn’t stop them from accepting campaign contributions from investment bankers or working for Goldman Sachs after leaving government.”

Indeed, they practice conspicuous consumption even as they condemn it among others.

“Worse yet,” Thornton adds, “they are completely indifferent to the assault on the constitutional order this rhetoric represents, or the divisiveness sown among the citizens by stirring up destructive passions like envy and resentment.”

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