Should America Aspire to Be Like Greece?
Wall Street executive Steven Rattner recently had a piece in the New York Times bemoaning rising inequality, and the fact that voters don’t seem to care about it. But we should care, argues Rattner: “Inflation-adjusted earnings of the bottom 90 percent of Americans fell between 2010 and 2013,” Rattner writes, “with those near the bottom dropping the most. Meanwhile, incomes in the top decile rose [by 2 percent].”
But how in the world is this an inequality problem? We should obviously be unhappy if earnings for 90 percent of the population have fallen over the last three years. But is Rattner saying that things would have been better had the top 10 percent seen their incomes decline as well? That, after all, would lead to less inequality.
What Americans care about is prosperity, and the real question is what policies would make all of us more prosperous? And if that’s what we’re after, then we should be deeply troubled by Rattner’s proposals. His solution to the so-called problem of inequality is to have the government loot the rich and spend a ton more money, so that we can become more like the low-inequality countries Rattner admires.
[O]ur taxes, while progressive, are low by international standards and our social welfare programs — ranging from unemployment benefits to disability insurance to retirement payments — are consequently less generous.
This quote comes just after a chart showing that the U.S. has more inequality than Ireland, Spain, and Greece. In other words, Rattner wants us to embrace policies that will make us more like these economic juggernauts.
There is absolutely no reason to think about economic stagnation in terms of inequality. Unless you’re driven by resentment against success, the problem is not that 10 percent of us have managed to progress over the last three years, but that 90 percent of us haven’t. And if Rattner thinks the cause of that problem is that the government hasn’t seized enough wealth, or spent enough money, well, then I’d love to hear his argument.