Inequality: Has The Income Gap Narrowed?

Two icons of the Left -- economist Thomas Piketty and Senator Elizabeth Warren (D-MA) -- talking about rising inequality last June.  But by some measures, inequality is shrinking.  [Credit: National Review]

Two icons of the Left — economist Thomas Piketty and Senator Elizabeth Warren (D-MA) — discussing rising inequality during an event last June. But by some measures, inequality is shrinking, not rising. [Credit: National Review]

“The game right now in America is rigged. It is rigged so that those at the top keep doing better and better, and everyone else is under increasing pressure, is under increasing economic strain…And that is the profound danger that we see from great inequality.” Elizabeth Warren (D-MA)

Democrats are still stinging from last month’s epic defeat at the polls.  Some of them attribute that unhappy outcome to ideological temperance.  The party would do better, some argue, if their candidates took a more strident tone, denouncing the rich, preaching that Washington governs in the service of Wall Street, and calling for more aggressive redistribution of income and wealth to dampen rising inequality.

But a new study published in the Southern Economic Journal pulls at a critical thread of that narrative.  It found that, at least according to one measure of income, the gap between rich and poor actually narrowed between 1989 and 2007. Continue reading

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