The Atlantic: Is the Awfulness of Income Inequality Mitigated by the Cheapness of Consumer Goods?

[portlander23]

Is the Awfulness of Income Inequality Mitigated by the Cheapness of Consumer Goods?

Concerns about inequality are sure to intensify as the 2016 presidential campaigns take off. During the most recent Federal Reserve meeting on economic projections and interest rates, economists spoke out against raising rates on the grounds that doing so might hurt the labor market. There was even a protest at the Fed’s Jackson Hole summer retreat opposing central bank actions that could hurt wage growth for most Americans.

But some people take a rosier view. For example, according to Bloomberg Business, Jamie Dimon, JPMorgan Chase’s CEO, had the following to say:

“It’s not right to say we’re worse off,” Dimon said Thursday at an event in Detroit in response to a question about declining median income. “If you go back 20 years ago, cars were worse, health was worse, you didn’t live as long, the air was worse. People didn’t have iPhones.”

This is an excellent companion to Slate's recent article:

Slate: Why Income Inequality Isn’t Going Anywhere

Rich elites—even rich liberal elites—don’t believe in redistributing wealth.

Our experiment also allowed us to measure how subjects trade off equality against efficiency. Subjects who care only about efficiency respond very sensitively to changes in the price of redistribution. When giving is expensive, they give little; when it is cheap, they give a lot. By contrast, an equality-minded subject will always ensure that both she and her recipient end up with the same amount, even if it means that less money is paid out overall.

What’s more, elite Americans show a far greater commitment to efficiency over equality than ordinary Americans. And this time, the bias toward efficiency increases with each increment of eliteness.

There's a very real disagreement about fundamental values here. The idea that efficiency is a higher ideal than equality leads to thinking like Mr. Dimon's. I don't think this is merely a justification for his behavior, I think it's a fundamental world-view difference.

The Slate piece provides the context that this sort of thinking isn't merely a partisan divide, but a class divide. Because it is the wealthy who are primarily funding elections, it's going to be very difficult to attack inequality because the people who will likely represent us will either share or be sympathetic to this world view.

We're in a very difficult situation. Because of decisions by the Supreme Court (going back further than Citizens United), we're stuck with an electoral system that tilts the scales against addressing inequality.

On the Democratic side, we have Mr. Sanders who won't take Super PAC money. Of course, since he's not taking the money, it's going to be very difficult to win. We also have Mrs. Clinton. She is taking tons of Super PAC money, but can she deliver on inequality when the people who are funding her most likely prize efficiency?

It's a tough one.

[rocktivity]

1. Not if the end result is even MORE consumers

who can't afford to buy them.


rocktivity

[Human101948]

2. They believe in efficiently hoovering up all the wealth...

Like the trawlers scooping up all the marine life in the ocean until it becomes a wasteland they are not satisfied with having more. They have to have it all.

"The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness."

John Kenneth Galbraith

[WinkyDink]

10. I'm tellin' youse guys---It's all so the billionaires can escape Planet Earth, literally, to live on

Mars. That won't come cheap.

[Erich Bloodaxe BSN]

3. No.

Because cheap goods are often just that - cheap. They're not quality items that last, but 'disposables' that go obsolete or break quickly, filling landfills and polluting our oceans. And then have to be bought again and again.

[historylovr]

6. +1

[pangaia]

4. WHAT?

Jamie, go fuck yourself.

[6chars]

5. healthcare, college, housing are going up up up

but cell phones are dropping in price. do the math.

[Matariki]

13. Seriously.

Last edited Sat Sep 19, 2015, 05:38 PM - Edit history (2)

(edited to correct my math)

My parents bought their first house for $13k. My comparably sized house cost me 25 times what they paid (and when it sold last year it was 30x what they paid). I'm definitely not making 3000% more than what my dad made. In fact it takes two household members working to come close.

Or lets just look at what percentage of income folks are paying for housing, education, and healthcare - compared to past generations.

Articles like this are a bunch of bs.

[Erich Bloodaxe BSN]

16. My parents house payment was

$160 a month. We're in a 'cheap' part of the country, and when I bought basically the identical house next door, my initial payments were 700 a month, that I eventually refi'd down to 500 a month. And, of course, my house has dropped close to 20% in value since then.

[historylovr]

7. "Rich elites—even rich liberal elites—don’t believe in redistributing wealth."

Can't argue with that.

[WinkyDink]

9. Au contraire! They most decidedly believe in policies that take from others to give to themselves.

[WinkyDink]

8. "Cheapness of consumer goods"? You mean, the items from CHINA and GUATEMALA and MYANMAR, etc.?

HERE'S the problem:

Americans with money---and I'm talking still part of the Middle Class---DO NOT CARE ANYMORE about the poor.

The 1960's are OVER.

[Eleanors38]

11. Mitigated like mercury treatments will for a time hold back syphilis.

[Matariki]

12. What, 'cheap' like this $350k house in San Francisco?

[Matariki]

14. Jamie Dimon is a disgusting POS

who doesn't deserve to be quoted anywhere on anything. And he has a lot of nerve using 'we' in this sentence - "It’s not right to say we’re worse off”

[smirkymonkey]

15. +1000

I can't even say what I really think about that disgusting jerk.

[historylovr]

17. Kick