Inequality: What We Earn vs. What We Consume

Is inequality better measured by what we earn or what we spend? The difference is surprising. [Credit: Politic.org]

Is inequality better measured by what we earn or what we spend? The difference is surprising. [Credit: Politic.org]

Is your standard of living better measured by what you earn or by what you buy?

The question may seem an odd one, but it is critical to understanding the problem of rising inequality. Continue reading

Paul Krugman and the Inequality Deniers

Recent criticism of Thomas Piketty's Capital in the 21st Centruy has drawn the ire of the splenetic Paul Krugman. [Credit: National Review]

Recent criticism of Thomas Piketty’s Capital in the 21st Century has drawn the ire of the splenetic Paul Krugman. [Credit: National Review]

There is growing concern among people on the Right and Left about income inequality. But you wouldn’t know that from reading Paul Krugman’s latest screed.

What stirred Krugman’s bile this week was criticism of economist Thomas Piketty’s book, Capital in the 21st Century, a work that has attained canonical status among the Left on both sides of the Atlantic. Continue reading

Maximum Wage: Solution to Inequality?

The Swiss campaign to limit executive pay fell short, but are there good solutions to the problem of income inequality?

The Swiss campaign to limit executive pay fell short, but are there good solutions to the problem of income inequality?

We know that people’s frustrations run deeper than these most recent political battles. … They experience in a very personal way the relentless, decades-long trend. … And that is a dangerous and growing inequality and lack of upward mobility that has jeopardized middle-class America’s basic bargain — that if you work hard, you have a chance to get ahead. .I believe this is the defining challenge of our time: making sure our economy works for every working American. It’s why I ran for President. It was at the center of last year’s campaign. It drives everything I do in this office.President Obama

Economic inequality is a politically potent issue.  Vanderbilt University professor Larry Bartels believes that it was a critical one in the 2012 Presidential race, adding 2 to 3 percentage points to President Obama’s share of the vote and 1 percent in battleground states.  The President’s advantage on this issue, Bartels says, was largely symbolic, having more to do with the perception that his opponent’s great wealth had detached him from the concerns of ordinary voters. People motivated to vote for the President because of this issue did so more because of who they believed Mitt Romney was than because of what the President proposed to do. Continue reading