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It's a Myth that Conservatives Accept Rampant Inequality
Renowned behavioral economist Dan Ariely (Duke University) and Michael I. Norton (Harvard Business School) recently demonstrated that everyone - including conservatives - thinks there should be more equality.
Their study found:
Respondents
constructed ideal wealth distributions that were far more equitable
than even their erroneously low estimates of the actual distribution. Most important from a policy perspective, we observed a surprising level of consensus: all
demographic groups—even those not usually associated with wealth
redistribution such as Republicans and the wealthy—desired a more equal
distribution of wealth than the status quo.
Ariely comments:
Taken as a whole, the results suggest to us that there is much more agreement than disagreement about wealth inequality. Across differences in wealth, income, education, political affiliation and fiscal conservatism, the vast majority of people (89%) preferred distributions of wealth significantly more equal than
the current wealth spread in the United States. In fact, only 12 people
out of 849 favored the US distribution. The media portrays huge policy
divisions about redistribution and inequality – no doubt differences in
ideology exist, but we think there may be more of a consensus on what's
fair than people realize.
How could the media portrayal regarding this issue be so wrong?
Well, for one thing, as a study the Pew Research Center found,
the corporate media tends to take Wall Street's view on economics.
Indeed, the media is largely set up to spout propaganda which supports the view
of the powers-that-be. The financial sector has been by far the
biggest beneficiary of government policies over the past 10 years or so.
So the media tends to defer to Wall Street's own arguments against
equality.
Many conservatives are, of course, opposed to a redistribution of wealth via raising taxes on the wealthy.
The conservative argument is straightforward: people who have worked
harder should be able to earn more money by the sweat of their brow. If
we tax the wealthy in order to redistribute wealth to help the poor,
then no one will be motivated to work hard, as the wealthy will be
penalized and the poor can sit back and take hand-outs.
Whether you agree with that argument or not, everyone agrees that a system which uses the power of the state
to reward the fraud and gambling of the largest banks and biggest
corporations through socialism for the rich and capitalism for everyone
else is not free market capitalism, and is downright anti-American.
As I noted last November:
Conservatives tend to view big government with suspicion, and think that government should be held accountable and reined in.
Liberals tend to view big corporations with suspicion, and think that they should be held accountable and reined in.
Irreconcilable difference?
Not really.
Specifically, a Rassmussen poll conducted in February found:
70%
[of all voters] believe that the government and big business
typically work together in ways that hurt consumers and investors.(and see this).
Remember that the government helped and encouraged the giant banks to get even bigger, and then has hidden their insolvency and shielded them from the free market, and helped them grow even during the severe downturn.
In return, the big banks and giant corporations have literally bought and paid for the politicians.
Conservatives might call it "socialism" and liberals might call it "fascism" - they are the same thing economically.
But all Americans - conservatives and liberals alike - can agree that it is not capitalism, and it is not American.
As I pointed out in December:
Conservatives hate big unfettered government and liberals hate big unchecked corporations, so both hate legislation which encourages the federal government to reward big corporations at the expense of small businesses.
As an example, both liberals and conservatives
are angry that the feds are propping up the giant banks - while
letting small banks fail by the hundreds - even though that is horrible for the economy and Main Street.
The Dodd-Frank financial legislation ... enshrines big government propping up the big banks ... more ore less permanently.
Many liberals and conservatives
look at the government's approach to the financial crisis as
socialism for the rich and free market capitalism for the little guy.
No wonder both liberals and conservatives hate it.
And it's
not just the big banks. Americans are angry that the federal
government under both Bush and Obama have handed giant defense
contractors like Blackwater and Halliburton no-bid contracts. They
are mad that - instead of cracking down on BP - the government has
acted like BP's p.r. spokesman-in-chief and sugar daddy.
They
are peeved that companies like Monsanto are able to sell genetically
modified foods without any disclosure, and that small farmers are
getting sued when Monsanto crops drift onto their fields.
They
are mad that Obama promised "change" - i.e. standing up to Wall
Street and the other powers-that-be - but is just delivering more of the same.They
are furious that there is no separation between government and a
handful of favored giant corporations. In other words, Americans are
angry that we've gone from capitalism to oligarchy.So
if both liberals and conservatives hate something, it doesn't
necessarily mean it's a compromise. It may mean that they feel disenfranchised from a government that is of the powerful and for the powerful.
In other words, while many conservatives are against raising taxes on the wealthy, they are overwhelmingly for stopping the use of the power of the state to increase inequality. See this, this and this.
This is an area of agreement between people of good faith on the left and on the right. As Robert Shiller said in 2009:
And
it's not like we want to level income. I'm not saying spread the
wealth around, which got Obama in trouble. But I think, I would hope
that this would be a time for a national consideration about
policies that would focus on restraining any possible further increases in inequality.
If we stop bailing out the fraudsters and financial gamblers, the big banks would focus more on traditional lending and less on speculative plays
which only make the rich richer and the poor poorer, and which
guarantee future economic crises (which hurt the poor more than the
rich).
Indeed, if we break up the big banks, it will increase the ability of smaller banks to make loans to Main Street, which will level the playing field.
Moreover, both conservatives and liberals agree that we need to prosecute financial fraud. As I've previously noted,
fraud disproportionally benefits the big players, makes boom-bust
cycles more severe, and otherwise harms the economy - all of which
increase inequality and warp the market.
And as I noted last April, prosecutors could claw back ill-gotten gains from the criminals and use that money to help the economy:
The government could use existing laws to force ill-gotten gains to be disgorged (see this and this) [and] fraudulent transfers to be voided ...
The bottom line - as conservative blogger Michael Rivero writes - is that too much inequality kills the market:
For
an economic system to be a system, money must flow freely at all levels
and in all corners. When those in charge of the system decide to so
order the mechanisms of the financial sector to drive the money into a
single huge pile, the system cease to be a system and a crash becomes
inevitable. One might as well force all the blood in your body to stay
in the brain. The end result is the same; death for the body.
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Behind all this to-ing and fro-ing as the fundamentals of American capitalism and democracy are undermined before our eyes by the incremental and collective actions of political and economic elites over three decades of world hegemony; we now try and understand retrospectively the root causes and the remedies to the increasing divide in society. Two issues seem to emerge : a) what is specific to 'americanism' in the context of two thousand years of western civilization. b) What is the trade off in the context of two and a half centuries of US history between state initiative for "collective good, individual's sacrifice of personal rights to maintain civilization's hold against constant impingement of private sector's feudal jungle" and the necessary, vital realm of private initiative for "innovation, progress, pursuit of happiness".
Keeping in mind that western civilization is based on two principles to feed its actions undertaken by its key leading entrepreneurial individuals, after debate and consent by a majority of others : 1) the rule of logic not superstition or divine inspiration, 2) the primacy of fact over fiction or prejudice fed often by irrational fear.
It is a.darn good thing those people polled dont make economic policy. Sure, we could probably make some changes without distorting incentive. However if we flattened the income curve as much as joe and jane sixpack want, then good luck. We will all be impoverished equally. It is the maniac working 100 hour weeks trying to build a business that is the cause of our high standard of living. Only.fools want to kill his motivation.
Like investment bankers? Could we please kill their motivation?
You have two political parties who argue about how they should run your lives. As long as you consent to that state of affairs nothing will change. We once had a political system in which power was distributed as much as possible - and yes the rich and connected did well in that system. Then the progressive movement wiped that system away because it made it very difficult to control peoples lives and now we have a system where power is concentrated as much as possible. In this system instead of doing well the rich and connected have total control. And as long as you continue to centralize power you will continue to have the massively powerful do much better than the bulk of the population.
It amazes me how many folks will decry the current inequity yet believe they can improve this state of affairs by a stronger central government. It is the central government that IS THE PROBLEM. The rich and powerful will ALWAYS co-opt the system, but a distributed system is much more difficult, and requires much more resources, to control. The changes to our system that were fundamentally to create this change (the Fed and Wickard v Filburn) were driven by the powerful in order to consolidate their power.
I see no hope of change because the powerful have created SUCH an incredible hold that is basically invisible to the un-involved (50% of Americans) AND because a significant % of those who DO have concern for the problem honestly believe THEY could solve the problem if only THEY could run everyone's life the PROPER way. Nope - if power is centralized the powerful will continue to rape us all. Period end of story. And as long as you make arguments for how the state should FIX inequality you are part of the problem not part of the solution. The point of attack needs to be breaking down the central state and redistributing power (as it was for ~125 years of staggering growth) into 50 laboratories for equality.
I fully expect to hear howls regarding how "unequal" our system was during that first 100-150 years. I agree but I'd reply that we were the MOST equal on earth during that time and provided the most opportunity. I also believe that what matters is equality of opportunity not equality of result - at the moment we do not remotely have either.
Then tradegy of the commons happens, we run out of phosphorous, and Louisiana/Mississippi gets most of the central U.S.'s shit that they dump into the Mississippi.
I have to agree with GW here Big Government is bed with Big Business. left versus right dichotomy is Bullshit. MSM further pushes this left/right stuff. It makes for lazy, easy journalism "our side good, their side bad" stories. the truth is many of our issues (in particular the economic ones) can't parsed that easily.
I think we are all in agreement here.
To this somewhat cynical "unterseebootefahrer", who now trades for a living to earn the right to poke fun our "betters" on Wall Street, it appears to me that what we have here in America is a new type of politico-economic system...A "Kleptogarchy" where those at the top have the unbridled, government-granted right to steal all they can while there are still things left to steal...
Our "Egypt Moment" can't come soon enough....
"Citizen's Amphibious Assault" on the Hamptons, anyone?
KrvtKpt. laughing swordfish
DKM Trading
Well, its good to see more and more people catching up to where the Catholic Church was back in 1891.
http://www.papalencyclicals.net/Leo13/l13rerum.htm
At this rate, by 2100 we might be getting somewhere.
Nah, the church was against Socialism by virtue of Marx going:
"Religious distress is at the same time the expression of real distress and the protest against real distress. Religion is the sigh of the oppressed creature, the heart of a heartless world, just as it is the spirit of a spiritless situation. It is the opium of the people. The abolition of religion as the illusory happiness of the people is required for their real happiness. The demand to give up the illusion about its condition is the demand to give up a condition which needs illusions."
Nobody likes being called a fairy tale.
If waving a wand would reduce government involvement in my life by 50% (heck, 10%) but would also make Bill Gates twice as rich as he already is (an inequality widener trade!)...I'd do it in a second.
Move to Camden, NJ. You'll love it.
And then allow somebody with so much more money be able to buy government influence to re establish itself into your life at their leisure?
Sounds like a shortsighted deal to me. Separation of politics and money into "Political science" and "Economics" as separate fields is probably one of the worst decisions of the non-physical sciences, it should have remained "Political Economy" and been studied as such.
...so they donate to those fradulent charities that help out the Israeli middle class, take the absurd write off and leave the bill to the American middle class....along with bribery money to the likes of Mubarek who skimmed it all and took it the 10s of billions out of his country. What disgusting pig.
...meanwhile, with gas at $3.60, the fuckin Arabs write more checks to the Taliban who will buy more explosives from the Chinks, more of our boys get their legs blown off in a stupid war, while our Nobel Peace Prize winner plays hoops "at da House".
What a fucking waste of a country.
Rampant Inequality ? How about raw stupidity all around.
What, are we doing Champagne dinner polls here now ?
STFU.
Methinks without rampant inequality, no one would give to moveon.org.
End inequality and you defund PETA.
It's not a myth. Conservatives don't encourage inequality, but they don't have a problem with it either.
In other words, not trying to engineer outcomes in other people's lives.
Imagine that!
A very nice rational contribution. Despite differences that exist, it is clear that most people here have more in common than they would like to let on. Thank you.
Historically, the US citizens have shown high consensus on stuff like robbing blind the Indians...
Some Thomas Sowell Quotes:
"Socialism is inherently inefficient and people suffer from the waste that is not available to anybody, especially the poor."
"Socialism in general has a record of failure so blatant that only an intellectual could ignore or evade it."
"Liberalism is totalitarianism with a human face."
"Although socialism has long claimed to be for the poor, it has probably done more damage, on net balance, to the poor."
Conservatives give more, by far, to charitable giving and enterprise. The more liberal a person is, the less they give. And the numbers are not small. $295 Billion was given in 2005 and conservatives gave 60% more.
--"Who Really Cares, America's Charity Divide" Arthur C. Brooks, 2006.
Move beyond your current paradigm.
Politics is the distraction.
One wonders how much was for the orchestra and "religious giving" that doesn't go to the poor, unless you consider the defense fund of the boy lovin' priests or the megachurch pastor's private jet fund "charity". The data presented didn't impress me with their methodology.
Have you read the book you quote on charitable giving? I have not.
Perhaps you can tell us if this "60%more" has been adjusted for the individual net worth?
Also, any info on labor contribution? e.g. if conservatives donated all the money, who took the (lower paying) jobs in charitable work that were financed by these donations - it certainly was not the persons who "made" these godzillions.
ps. the "junk" was not mine - it is still in my trunk.
I think this is what happened during the 60s anti-war movement, you had various groups and interests coming together and becoming aware of how to take action. Blacks and whites started finding common ground and this scared the fuck out of the man.
Now this is what the elites fear... left / right, black/white/hispanic/other becoming aware of the matrix and uniting.
GW, You are the reason I check in with ZH every day, you offer hope that someday the left and right may come together on a few issues, and fight the powers who are damaging all of us.
If you're not an anarchist, you're just not conservative enough to be trusted.
Nicely put.
If we watch the Magician's right hand placing all the partisan crap into two piles we are deflected away from the real issues. This historic deflection was well defined/promoted during the Wilson era and has been used effectively ever since. Both R and D, Cons. or Progs have enabled the corrupt theft of most of our wealth. Many RINOS and Progressives will vote for extension of the Patriot Act which allows searches and seizures without warrant/judicial review because they are statists who have fostered this indoctrination and have promoted the terrorist strawman. Surprisingly, the entire Tea Party new group voted against the extension; yet they are so derided and defiled.
Take the time to see who actually voted for the extension; they all should be tried for treason and hung with their Wall Street benefactors.
Both R and D, Cons. or Progs enabled the corrupt theft of most of Indian wealth to transfer to the US citizenry.
"But all Americans - conservatives and liberals alike - can agree that it is not capitalism, and it is not American."
Oh if it were only true that "all" Americans would be hip to the scene like that. Capitalism, true capitalism is truly a moral philosophy and at the same time, the most derided and deliberately abused system.
I was just reading about the signers of the Consitution. All of these men were educated by their families, many graduated from colleges like Yale by 17 and had their own businesses by 21. Many were self-taught lawyers.
I know I'm off on a tangent but until enough people realize that the education of their kids should be supplemented by the public schools, not abdicated to them, there simply won't ever be a time where "all Americans" will have an understanding of the different social philosophies and be able to recognize Capitalism when it bites them on the collectivised rear-end.
Sorry old chap - nice idea but Mum and Pop are too busy working to pay the healthcare bills, taxes, mortgage, college, "retirement" and every other inflated cost of the industriserv-inforporno economy to interact with the kids.
It all comes back to what our "society" deems to have value, in Amerika this is determined by the corporatocracy. Education of the next generation is considered a liability by TPTB. Our current education system is designed to limit the ability of a bright child to excel. Can you image a 17 yo graduating with a law degree from Yale or any other college? Irrespective of the SAT scores and academic ability TPTB will tell you that it is "inappropriate" to place that child in an "adult" setting, the child needs to be kept with age appropriate peers......
I speak from personal experience, most (unless you rub a lot of money on it) colleges will NOT allow a academical qualified child to attend until they reach the age of 15, (a 13 yo child with high ACT, SAT and two online College AP classes in Macro and in Gov & Politics scoring a 5 out of 5 and a 4 out of 5 on the national test at 12 years old), (even if an adult has offered to accompany and attend college classes with the underage child) has been denied college admitance solely due to age....... Filed a formal complaint with the Federal Department of Education and a year and a half later still no determination... kid is getting a first hand lesson in "the system".......
This kid reads the NYT with breakfast, forces me to read Krugman (who wrote the Macro text book, her pre teen idol ugggg) calls him "Wolfman Jack"..... so I can "discuss" the current issues with her... I haven't introduced her to ZH yet..... lol but I did show her the Mises site... and of course GW's Blog.... The kid has pointed out that GW has a writing style very similar to Krugman's.....
The system is not going to allow our children/grandchildren to have the quality of education that our founding father had....
Counter-ancedote, I know a kid who has his Physics masters at the age of 18 working on his PhD., having attended a university since 13. I work with him. He is a little awkard, but can certainly handle the material. Perhaps you just fail at beiong an adovcate for this child.
Also, I'd certainly hope not to have the same education that our founding fathers had. I mean, how would we know our cell phones and microwaves work? The world has become more technically complex than that of previous centuriers.
Well done.
Politics is the distraction.
Individual liberty and social justice both begin at the loci of the individual, never beyond it.
GW, what frustrates me is that the other day you went in and changed the text of your contribution for the apparent affect of addressing comments that pointed out some shortcomings in the original. But you didn't tell your readers that you made the change. I believe you provide an important perspective but credibility is essential. Your response to this would be of value.
Sincerely,
Thanks GW.
We all see it's unfair & corrupt...we all see the linkage between DC and Wall Street.
We needed Glass-Steagall brought back, not a Dodd-Fwank giveaway.
Out of the interests of all I will say no more...except good post.
Oh a link to a site that lists 'Israel's whores in Congress', and quotes from a Keynsian who worked for FDR. Yay.
Huh? What are you talking about?
Do tell, what is this alternate mechanism that would increase equality from the current state of inequality that does not include "big business" or governments?
its called following the constitution and enforcing laws that are formulated through public discourse instead of written by lobbyists and voted on in secret.
Which gets us throught this current situation... how?
Step 1: Follow constitution
Step 2: ????
Step 3: Gini coefficient goes down to some desirable number? I mean, is there some point in time where the Gini coefficient was a desireable value, and when was that? Did people follow the constitution then? I'm assuming that we are talking about the constitution post 14th amendment, so owning slaves is out of the question. And also without more government intervention, mind you.
Somehow I see a lot of intermediatary steps, that just aren't there in what anyone here is saying. Sure lots of feelgood vengenance against the banking community, but from there, what?
Also, the same article says that conservatives not only desire greater equality, but have zero clue as to the actual distribution. That lack of education is worrying.
Methinks 'Nootropic' needs to up his dosage.
Nah, I do pretty good TYVM.
Dear George,
I had noticed the contradictory posts on this site over the last several weeks that I have been visiting and posting. I think we all basically agree on the problems, we just come from different angles as to the solutions. And we seem to get caught up in defending our "camp". The buzzwords get us going before we stop and think. That is what our bought and paid for politicians prefer. We are more able to be manipulated that way.
Thanks for your excellent articles.
gh
I agree. Great post George and sellstop. We need to get past the fake 'left/right' debate that our stupid media so loves.
Thank you GW, sellstop, and weinderdog43. Uniting and fighting is far better than succumbing to the divide and conquer campaign.