Inequality, Eek!

A running gag in The Good, the Bad, and the Ugly involve variations on the line: "There are two types of people in the world, my friend …"

In that spirit, I'd like to say: There are two types of people in the world, my friend: those who get all excited about inequality and those who don't understand the first kind of people. I'm in the latter group.

This observation is set off by a Daniel Drezner blog entry where he mentions he's also usually "unfazed by income inequality." (He also adds some reasons why other people might not be as fazed as they could be.) Professor Drezner was, in turn, inspired by a Brad DeLong blog entry, which (in turn) quotes liberally (heh) from a Paul Krugman NYT op-ed column behind the TimesSelect wall; it's clear that DeLong and Krugman are in the first group.

Here's Krugman:

So who are the winners from rising inequality? It's not the top 20 percent, or even the top 10 percent. The big gains have gone to a much smaller, much richer group than that. A new research paper by Ian Dew-Becker and Robert Gordon of Northwestern University, "Where Did the Productivity Growth Go?," gives the details. Between 1972 and 2001 the wage and salary income of Americans at the 90th percentile of the income distribution rose only 34 percent, or about 1 percent per year. So being in the top 10 percent of the income distribution, like being a college graduate, wasn't a ticket to big income gains. But income at the 99th percentile rose 87 percent; income at the 99.9th percentile rose 181 percent; and income at the 99.99th percentile rose 497 percent. No, that's not a misprint.
And my attitude is about 50-50 between
  1. So what?
  2. Good for them!

We're supposed to look at these numbers and shiver with horror and revulsion, apparently, but (once again) there are two types of people in this world, my friend, and I'm the type that doesn't do that.

Let me mention some common well-known fallacies about these kind of numbers:

  • The people in the "top X percent" of the income distribution aren't the same people from year-to-year, although the Krugmans will invariably speak as if they were an unchanging group of citizens over years and decades. This feeds the "us-versus-them" resentment mentality, but it's a considerable fudge.

  • Also the strong implication in Krugmanesque rhetoric is that the amount of income in any given year is a fixed, given, pie. Once it's baked, someone (the "distributor", I guess) figures out how to "distribute" it. If someone gets more of the pie, it necessarily follows that someone else got less than they would otherwise. This (of course) also feeds the "us-versus-them" mentality. But there's no such cause-and-effect. Someone's income is a result of economic activity, not a baking recipe. If Steve gets a $5000 raise, that doesn't mean that $5000 inexorably (and somehow magically) disappears out of everyone else's paychecks.

But let's assume that, fallacies and eat-the-rich rhetoric aside, a small fraction of people (unfortunately none of them our close personal friends) really do have considerably higher incomes and wealth than the rest of us from year-to-year. Again: (a) so what?; and (b) good for them! Is it any skin off our relatively unwealthy noses?

Krugman and DeLong would no doubt go out of their way to deny that they're powered by mere resentment; they probably think that those numbers indicate that there's some real trouble a-brewin' due to income inequality. Here's Krugman's handwaving on the matter:

Both history and modern experience tell us that highly unequal societies also tend to be highly corrupt. There's an arrow of causation that runs from diverging income trends to Jack Abramoff and the K Street project.

Let's be generous and assume the correlation Krugman asserts between inequality and corruption is correct. (Even though, since it's Krugman, there's no particular reason to believe it's not bullshit.) Even if that's true, isn't it clear that the "arrow of causation" points the opposite direction than Krugman implies? Were the Indian tribes that hired Abramoff caused to do so (somehow) because of inequality? Or did they do so to shift "income inequality" their own way? The question answers itself; corruption is almost certainly a cause of increased inequality, not the other way around.

Finally, I'd be derelict if I didn't (like Prof Drezner) link to James Joyner, who does a little math on Krugman's numbers:

So, shockingly, only the very rich are very rich. Or, to put it another way, not that many people make $6 million a year. Or, to put a number on it, only 29,821 Americans make that amount.

That's just wrong.

That's just funny.

Last Modified 2006-03-02 9:51 AM EDT

City of God

[Amazon Link] [2.5 stars] [IMDb Link]

I'm supposed to like this a lot better than I did. It's number 15 on IMDB's top movies of all time. But to my mind, it's not that great. The "shocking" thing here is you see children getting shot, and children shooting people in return. But once you get past that, there's not much else except a standard story of criminal rise and fall, which has been done numerous times, and better.

There's also a lot of tricky camera-whirling, which seems to have impressed some people. But it's just not my cup of tea.

Last Modified 2022-10-15 8:57 PM EDT

Hope I Die Before I Get …

Oops. Happy Birthday to Roger Daltrey. Roger is 62 today. (The Who is touring this summer. Do they still do "My Generation", and, if so, do they change the lyrics any?)

Last Modified 2006-03-05 7:41 PM EDT

Hitting the Big Time

Well, anonymously. I'm quoted at the NRO Corner here. (Background is here and here.)

I regret forfeiting the much-coveted prize ("guided tour of NR World HQ, free coffee provided"), what a fargin' ripoff, but I'll somehow go on with my life without it. Should have told Derbyshire that I read his book. (And this is sitting pretty high up on my to-be-read list.)

Last Modified 2012-10-25 8:22 AM EDT