Megan McArdle Really, Really, *Really* Doesn't Care About Income Inequality

Noah Smith, formerly of Noahopinion and now of Bloomberg, seems to be independent minded at a first glance but oh, the company he now keeps! He  now works for Bloomberg and he was assigned a debate on inequality with Megan McArdle. One assumes that the new guy was given the crap assignment, but maybe he drew the short straw. Either way, the result isn't pretty.

Inequality has emerged as a contentious issue since the financial crisis, and it figures prominently in the presidential campaigns of both political parties. Bloomberg View columnists Megan McArdle and Noah Smith try to make sense of it and figure out what, if anything, should be done.

Megan: What sort of inequality should we care about? Wealth inequality, income inequality, inequality of opportunity, inequality of mobility -- these tend to get lumped together. No amount of fair opportunity will produce similar outcomes for two different people. This tends to get ignored, because it's inconvenient for both sides.

Or because it's irrelevant to the question of a system set up by the rich to benefit the rich at the expense of the poor.

So what kinds of inequality should we talk about? And what kinds should make us shrug and say, "Yeah, well, life's rough sometimes"?

McArdle probably has no idea how callous she appears throughout this exchange, mostly because she is far too callous to care.

Noah: We -- policy advisers, writers, the government -- should care about what people care about. If people are upset that women soccer players get paid less than men, we should try to do something about it. If people are upset that most of the income gains over the past three decades have gone to people at the upper end of the distribution, then we should try to do something about that. Popular sentiment should be our guide here.

But there's generally a tradeoff involved -- make your society less unequal, and you might distort it in ways that also make everyone poorer. We have to balance those kinds of considerations. I'm just saying, if people care about some kind of inequality, we shouldn't ignore it.

Noah must be fair because that is what decent people do in decent society, but he insists that if We The People want something, they have the right to try to get it, within boundaries.

McArdle doesn't understand. His words do not penetrate her brain. She doesn't care about inequality. What else does anyone need but her gut reaction? The question is solved. Why the debate and fuss? Besides the paycheck from Bloomberg, of course. If something benefits Megan McArdle then it is the only right thing to do. Rank hath its privileges.

Megan: There's a lot to agree with in that, but let me suggest a few problems. First, what does it mean to say "We should care if people are upset"? Some people ARE upset that woman soccer players make less than male soccer players. Those people probably spend a lot more time thinking about it, and being upset by it, than the vast majority of people who don't care -- and wouldn't think about it even if you told them they ought to.

McArdle doesn't care about income inequality, wealthy inequality, or the shrinking of the middle class. As she said before, she only cares about the bottom rung of sustenance, which is so high, she says, that we really don't need to worry about the poor either. And if you cast your mind back to the past, you might remember that McArdle thinks sexism isn't a big problem because men are smarter than women anyway, racism isn't a problem because the free market would punish it and because blacks might be dumber anyway, and laws that eliminate privacy aren't a problem because women should feel bad about having an abortion. McArdle is extremely generous with any problem that does not affect her personally; it doesn't even exist.

Probably in 1900 most people didn't care about the grotesque inequality between whites and blacks, but we say they should have done something anyway. As an empirical description, the majority didn't care, and we didn't do much about it.

Of course anyone and everyone would immediately point out that 1900 is only 35 years after the end of slavery and the Civil War and abolition movement were considerable proof that the majority did care a tremendous amount, on both sides of the issue. It is a monstrously stupid thing to say but McArdle's job is to provide monstrous excuses for monstrous acts and she takes her work seriously, although her execution is anything but serious or competent.

The other question I'd ask is whether the vast majority of folks really do care about inequality very much. I don't think they care about it in the way that upper-middle-class elites do. For them, it's always about the upper 1 percent. But most people don't care whether Warren Buffett is rich. They care that they feel shut out of their local economy.

McArdle must pretend the two are not connected, of course. The laziness of her arguments is truly remarkable. Nobody cares. So what? Eh, only rich people care about the super-rich people. The poor only care about the local economy, like low wage jobs at McDonald's and J.C. Penny's and the Exxon gas station. That has nothing to do with the global economy of the rich.

Noah: First of all, let me say that most black people certainly DID care a great deal in 1900 about racial inequality. And if a policy is causing a minority a huge amount of pain, I'd say we need to deal with that.

Good for you, Noah. Your humanity will be wasted on McArdle but at least you tried to get her to acknowledge the existence of anyone but herself and her personal circle.

But telling people not to care about inequality just makes the whole job harder. Telling people to "just deal with it" makes them shut up, but it doesn't make them stop caring.

The whole point of McArdle's job is to make everyone else's job harder. Harder to stop pollution, harder to have workplace protection, harder to control your own body, harder to earn a decent living.

Megan: In my circles, and in my reading, virtually no one is saying we shouldn't care about inequality. Most articles on inequality are about how terrible it is, and so is most of the conversation I hear.

McArdle is saying it. McArdle just said it wasn't terrible, or even a source of concern. She's so dishonestly stupid, so stupidly dishonest, that she thinks ignoring her own words is an acceptable tactic of argumentation.

But let me lay my priors on the table: 1) I don't particularly care about income inequality, and I especially don't care about the 1 percent. The 1 percent makes life a little harder for folks like me, because in a flatter income distribution, I'd be more competitive for things like bigger houses. But this isn't a very large social problem.

McArdle pretends that concern about income inequality is just the greed of the upper class. She is not that greedy, she sniffs, so she doesn't care about the enormity of income inequality.

2) I do care a lot about what you might call socioeconomic hollowing out -- that is, the distance between the bottom and the middle and upper-middle class. I think that's just enormously destructive in a number of ways, starting with broad social cohesion and labor mobility.

Not that we can do anything about that, of course, because institutional success is both systemic and non-systemic and the poor are poor because of their culture.

3) I am as uninterested in wealth inequality as I am in income inequality. I think the evidence that the very wealthy disproportionately affect politics and policy with their wealth is pretty slight, and I don't think it has much to do with the problems faced by folks lower in the income distribution, either. Redistributing the Walton family fortune would do little to nothing to make people better off in the long run, or even the short run.

You would have to be the world's biggest moron to think that money doesn't disproportionally affect politics or sway political opinion. McArdle actually said that lobbying has no effect; I guess that like advertisement, companies and individuals spend billions for nothing.

4) I care hugely about inequality of opportunity and mobility.

Yes, McArdle said that motivation and aptitude are the only way to achieve success in this, the best of all possible worlds. As I mocked before, the idea that we live in a meritocracy is ludicrous and self-refuting.

5) And I also care a great deal about something that's not income inequality, but often gets lumped into it: the basic condition of the worst-off in our society.

She cares so much about the poor she denies they exist.

Noah: What you care about might not be the same as what other people care about. Just because you're not worried about the 1 percent doesn't mean that Americans as a whole think the same.

Burn! You go, girl! Or guy!

One thing I care about a lot is inequality of social status.

Oh, crap.

I don't like seeing some people lord it over others. My first real encounters with status disparities based on income or wealth didn't come until I moved to New York in 2012. It was really jarring to see rich people segregate themselves from poor people, refuse to date poor people, and get way more attention and respect than poor people. That increased the degree to which I cared about economic inequality. Now would government redistribution fix that? Maybe.

Do you know the difference between a cool person and a not-cool person? The cool person doesn't care what others think about him. He does his own thing, sometimes happy, something less happy, but always true to himself. Cool people attract others who like to be around non-judgmental, busy, generally happy and at-peace people.

I don't like to see rich people lord it over the poor either, so I mock them. I don't want to be one of the shallow, selfish, dangerous elite. Why would I want to be around people who respect money more than morality, consumer goods more than books and ideas, or celebrity more than a healthy, happy, interesting life? There's too much to read and write and joke and make and see and do.

The first thing you have to do to fit in with the wealthy is kiss their asses. You don't bring up anything that will upset them or get you kicked out of the rich's clubs. You spend too much money so they don't despise you for being poor, because you actually care about their scorn and want to live with their standards of merit and behavior. You constantly chase the next trend or fad because you're constantly trying to prove you belong.

Next thing you know you're whoring for any corporation that'll pay your bar tab and telling your equally vapid, cruel, selfish readership that you reeeealy don't care about inequality, darling, because the poors have tvs.

Megan: This is a really interesting point. I grew up in New York City in the 1970s, when it was much more equal. And yet there were still these vast disparities in status. Does income inequality actually drive status inequality? Or is it a proxy for other things? I doubt the head of General Electric today is more powerful and respected than the head of GE in 1955, even though the current head makes a whole lot more money.

Is status dependent on wealth? Who knows? Who could ever answer such a difficult question? Or is status based on something else that we won't bother to mention, such as how much money your parents have? What a dilemma!

Noah ignores McArdle's many stupid statements, probably because they now work together and evidently he's decided to make a manful attempt to have a real debate.

Noah: So what should we do about inequality? Heavy tax-based redistribution is not going to have a huge effect on status inequality. I still favor some amount of redistribution, because I don't want to see people on the bottom of the distribution in hardship. I want them to be in good health, have quality shelter and have all the nutritious food they need, as well as be able to get around their cities on public transit.

That's right, Noah. Paris Hilton would have just as high a social status if she were born Pam Higgins, daughter of Sam and Marilyn Higgins, dentist and teacher respectively, of suburban Atlanta. But points to Noah for realizing the poor deserve decent lives and deserve the help of the rich. He wants them to have affordable health care, decent homes, and more than enough to eat.

In general, massive redistribution isn't going to fix the problem of status inequality. But I am appalled by the vastly greater status given to rich people in America, especially in places like New York. I want to make working-class and lower-class people feel good about themselves, in addition to having the aforementioned material security. But I don't know how to do this.

Poor Noah. Let's give him a hand. The difference in status between the upper class and the grossly wealthy is directly related to the status of the poor. The poor don't care that Noah couldn't get a date with a rich girl. Snobbery will be with us always. The cave girl with two rocks probably snubbed the cave boy with one rock. But we can do something about inequality of money, and we had better do something about it or the poor will get all antsy and shoot-y. The old days of mobs storming the castle or medieval city walls are gone. The days of the now-crazy ex-middle-class-young man picking off the elite one-by-one with his NRA-approved basement arsenal are not.

Megan: I am also aesthetically disquieted by what New York has become. Sadly, I also have no good solutions to the sort of inequality I do worry about -- the social distance between the credentialed caste and everyone else. I am convinced this does enormous damage to our society.

Yeah, she mourns the distance between her fellow meritocrats in "the credentialed caste" and the little people who can't afford Uber taxis and Thermomixes and European vacations. She is so very distressed about the damage to our society as she upgrades her airline ticket to first class and chooses black sedans over tacky taxis with the poke of a finger on her $500 phone.

Everyone likes to harken back to the golden era of the 1950s. We don't really know why that ended, but one possibility is that it was simply a very fragile temporary state that couldn't last. So wherever we start looking for answers, we should make sure that we're not looking at a brief golden moment just before the whole thing collapsed of its own internal contradictions.

Of course Noah couldn't let such an immensely stupid, willfully ignorant statement stand.

Noah: I agree that world conditions change, and we need to be prepared for that. That also illustrates a weakness of redistribution as a strategy for fighting inequality. But as gross domestic product increases and our society gets more wealth, we should probably worry less about the costs of redistribution. So we might as well try it.

Or he can ignore it because his paycheck now depends on treating Megan "Jane Galt" McArdle, professional failure, as a serious economist and journalist.

And in the meantime, we should think about other ways to transform our society, not back into a 1950s society, but into a new, egalitarian culture that is better than anything we have seen in the past or present.

Poor kid. It appears to be a nice soul. Too bad he had to get McArdle smeared all over it.