US Inequality Is Simply a Function of Political Power

[xchrom]

http://www.commondreams.org/view/2013/09/27-9



Scott Sumner has become famous in the internet world and elsewhere as monetarism’s most capable defender. Sumner has a lot of things to say, but one is illustrative for my purposes here. Sumner argues that advocates of fiscal stimulus often make the mistake in their arguments of assuming away monetary policy as static or accommodating. His point is that you can’t do that because the efficacy of fiscal policy always depends on what monetary policy is doing in the background.

This same basic point also needs to be driven home for those who want to talk about how this or that thing will affect the distribution of income in society. Matt Yglesias’ review of Tyler Cowen’s new book gives us an excellent jumping off point for what I mean. In his book, Cowen apparently argues that coming technological changes will have certain negative effects on median incomes. Yglesias rightly points out (as does Cowen) that this outcome will only come if we fail to implement certain policies that will cause income to be distributed in some other, more desirable way.

When we talk about how economic changes, technological swings, and even education will affect the distribution of income in society, we always sort of assume away our government’s distributive policy as if it will or must remain static. But that’s not true at all. At any time we can change the huge set of policies that direct the distribution of income in society to something else.

The last few decades of median income stagnation didn’t have to happen. Even if you say it was caused by international competition or technological change or whatever else, the point is that if we had put a different set of distributive institutions into place, we could have avoided the maldistribution of income that we have seen. It is not like the median incomes stagnated because the economy as a whole stagnated. Quite the contrary: the economy is much larger on a per capita basis now than it used to be. If we had wanted to make sure median incomes continued to rise, we could have done that. We would have just needed different distribution policy.

[orpupilofnature57]

1. Ironic or tragic that SCOTUS at one time secured equality,have

made it so there will never be equality as far as Voting, buying selling, and basically living without the fear of government, or lack thereof .

[cprise]

2. Abolish Gerrymandering. n/t