Jim C

Ahh, agenda journalism at it’s best worst…

Jim C

While GDP is an excellent measure of economic activity and national wealth, it does not measure personal income. And while pre- or after-tax metrics each have their limitations, both are far better measures of income than GDP.

Furthermore, personal income for many can certainly decrease during times of increased economic activity and a growing GDP.
Various tax policies, while they certainly have a significant impact upon personal income, are never the overriding or deciding factor. Therefore I believe ‘hypotheticals’ in the tax arena, while important and instructive, are nevertheless if not tangential, then secondary discussions.

However, you are most correct that we are both discussing the “core of the liberal/conservative economic divide.” However, while I certainly advocate some tax reform, your presumption that I view tax reform as “the remedy” is off target.

I’ll save for later some points/counterpoints in the economic liberal vs. conservative debate. And standing alone, your comments make very good sense. But meanwhile, our currently wonderful GDP obscures many underlying problems that should not be ignored.
It is forecast that the US gap between the nation’s rich and poor if current trends continue, will match that of Mexico’s in the not too distant future. If our much greater GDP remains, that will still compensate for the gap, and other problems.

But if GDP drops as it certainly does cyclically, and if it drops precipitously, as it sometimes has in history, we will have major problems stemming from our past and current economic policies.

In looking at the Gini graph, I (facetiously) wondered if like Mexico, our future recession/depression poor would then cross illegally into Canada, where the income gap would be far less, even given their lesser GDP.

You say, “Our entire society excels because smart people who take bold entreprenuerial risks are rewarded commensurately by a free market,” and I wholeheartely agree! But it is not that simple. There are many other important factors to consider.

[Oh yes, regarding geese and golden eggs & class inequality, it reminded me of this, although it is not "exactly" related:-]

The law doth punish man or woman
That steals the goose from off the commons,
But lets the greater felon loose
That steals the commons from the Goose.
(1764 Folksong)

As for the rest, you have hit upon the core of the liberal/conservative economic divide. You are uncomfortable that, while the lower quintiles are experiencing economic growth, the pace of that growth is overtaken by those at the top. Your remedy for this “growing income inequality” I can only presume is some form of redistributionist tax policy. I would argue for an equality of opportunity rather than an assurance of outcome.

So long as all boats rise – or at least, all those not hopelessly mired in dependency, despondency and deficiency – then we all have access to a rising standard of living, and social pressures are eased. Focusing on the fact that some people are doing better – risk takers usually, quite often the people driving the engine of general economic growth which generates those same rising tides – is to play upon the politics of envy while simultaneously killing the goose that lays the egg.

Our entire society excels because smart people who take bold entreprenuerial risks are rewarded commensurately by a free market. Their success in turn fuels general economic activity, not the smothering hand of government attempting to regulate common outcomes.

Cheers

Indeed in the WSJ article you linked, that author (while ironically using the media to critique the media) conveniently selected only a few positive data points to support his message while he conspicuously, by their omission, avoided several major data points that would severely weaken his message ?