Income Disproportionality

It's unfortunate that income inequality has become a rallying cry of progressives because, as far as I know, nobody is advocating income equality. That would mean everyone gets the same amount, penny for penny. Wealth inequality is a similarly misleading term.

In fact, according to survey results I just made up, most Americans favor a merit-based system. That means people get rewards according to how good they are. This, of course, leaves open the tricky question of what we mean by good, but we can ignore that for now. As with art, I can't define good, but I know it when I see it. Or at least, I know bad when I see it. I'm sure we can all think of examples of bad behavior by people. If not, spend more time on Facebook.

There are two problems with our current system:

1. In general, the people who get the most (i.e., make the most money) are not the people we would consider good, and
2. The differences in income (or wealth) are way out of proportion to the supposed worth of the people who make/possess it.

Consider that the CNN Money list of of richest recording artists is topped by Madonna and Paul McCartney, at about $800 million and $660 million. And, again according to CNN Money on the American middle class, the average net worth for middle class Americans is about $300,000. In other words, Paul McCartney is worth more than two thousand times what you are! Two thousand!

And if that's not enough, according to Forbes, Laurene Powell Jobs, whose main accomplishment was marrying the guy who came up with tiny music players to listen to Madonna and Paul McCartney, is worth about $20 billion. In other words, she's worth 30 times what Paul McCartney is worth. Or about sixty thousand times what you're worth. Think about that. Steve Jobs' widow is worth an entire football stadium of you.

If you further scan down the Forbes list, you'll see a lot of familiar names. Apart from Forrest, Jacqueline and John Mars, whose fortunes all derive from candy, the bulk of these are business people … Wal-Mart, Microsoft, Apple, Amazon, Facebook, Google, etc. Sure, these are all interesting businesses, but what's their real value to society? When disaster strikes, an earthquake or a hurricane or a mine collapse, do we say: “Hey, we'd better get Apple guys in there so the victims can listen to iTunes!” Or “Quick! Let's upgrade them to Windows 10!”

Maybe I'm just weird, but if I really separate the value that people bring to the world from the amount of money they make, it seems obvious that the most important people in society are teachers, who help shape what kinds of people our children will become. Emergency responders … police, firefighters and medical personnel, who help get disasters under control and save lives. Authors and artists and musicians, who enrich our lives and help us share our common human experience.

Oh, and hedge fund managers.

Inequality

There’s a lot of hoopla now about the book Capital in the 21^st Century, by Thomas Piketty. Basically, Piketty claims that wealth inequality is about as bad as it’s been since the time of Solon, and that we’d better fix it or there’ll be hell to pay. (Or something like that. The back cover was kind of short on specifics.)

Naturally, there’s political uproar over these claims. The Financial Times excoriated Piketty, saying his methods were wrong, while Piketty rebutted the charge with “Nuh-uh. You are!”

Obviously, Piketty’s a smart guy. He’s an economist, which means he was able to stay awake in economics class, which is more than I could do and I think I’m pretty smart. But he misses one major point.

We LOVE inequality.

Seriously, it’s all we dream about. Look at popular entertainment. Harry Potter was a trust fund baby. The so-called reality shows are all about people willing to utterly humiliate themselves for a shot at wealth and fame … and we watch them! (Well, somebody does.) We don’t even have to mention professional sports. All the Disney movies and merchandise are about princes and princesses. And who would tune in to HBO for Game of Desk Chairs?

We make folk heroes out of jackasses like Cliven Bundy, and spend countless hours following the exploits of the Kardashians. The media hound the British royal family as if … well, as if they actually mattered anymore.

So the next time you hear someone complaining about wealth distribution, you can snap back with “Hey, if it weren’t for inequality, we’d all be stuck watching C-SPAN!”

Fortune Inequality

There’s been a lot of talk lately about income inequality, but no one’s addressed the real underlying issue of fortune inequality.

Consider former Republican candidate Mitt Romney. In a famous video, he dismissed nearly half of Americans as takers … people who are sponging off of the hard-working earners who had the foresight to be born to former auto executives and governors of Michigan. But Romney was able to overcome these advantages by selling some stock.

Or consider the Koch brothers, Groucho and Cheapo, innocent victims of a series of lawsuits which left them saddled with responsibility for Daddy’s oil business and its enormous profits. By sheer determination, they’ve been able to scrape together a few meager millions to fight the evils of environmental indulgence and healthcare coddling.

And, of course, there’s the seemingly endless succession of Bushes, burning with political ambition but afflicted at birth with a father who was “out of the loop” during the Reagan administration.

All of these victims faced adversity and ill fortune without complaint.

Compare this with all those whining lower and middle class ne’er-do-wells who rashly got themselves born into broken homes, to drug-addicted or HIV-positive parents. Surely those immoral and amoral parents deserve to see their children marginalized by good, earnest job creators.

The 1%

There was a great graphic in XKCD yesterday, depicting the scale and distribution of money in the U.S.  However, because of it's scope and completeness, it may have obscured one issue which is at the heart of the whole Occupy Wall Street movement.

According to Forbes (quoting UC-Santa Barbara professor G. William Domhoff), the top 1% of the country controls 42.7% of the financial wealth, which looks something like this: