You Are Poor Because You Are Inferior

You will not be surprised to hear once again that Megan McArdle doesn't have a problem with income inequality.

“Equality,” wrote Balzac, “may be a right, but no power on earth can convert it into a fact.”

How incredibly useful. I know that when I am thinking about income inequality my first thought is of Balzac, who supported the rights of royalty. However, the quote is very useful when you intend to conflate individual differences with the systematic and deliberate impoverishing of the lower and middle classes in the US today.

Just ask any schoolchild who has watched some classmates breeze four grades ahead in the math curriculum as others struggle to complete their daily assignments. Life is rife with inequality: Some people are good looking and others plain, some clever and others slow, some soar to popularity while others long to be noticed.

Funny thing--going by personal abilities, McArdle should be at the very bottom of the economic heap. She can't do math, her ethics are a horror show, her ability to reason is nearly nil, and her education, despite its mind-boggling expense, is utterly insufficient for her needs. Yet she is an enormous success (as these things go) because of her birth to wealthy, connected parents.

Life is not fair, conservatives tell us, to excuse away a system that deliberately exploiters the powerless for the enrichment of the powerful. Yeah. We know life isn't fair. We can do something about that or we can snigger and smirk and make lots of lovely money telling everyone else to suck it up and admit they are failures because they are inferior.

To Megan McArdle.

No wonder we are so preoccupied with inequality, and no wonder our conversations about policy solutions leave off many of the inequalities that most worry us. The world is full of problems, but public policy recognizes only those for which there’s a reasonable chance the government might attempt a solution. Any other other “problem” is simply a sad fact, and will remain so.

This is why we are so preoccupied with inequality.

 

 

The elite wrote the laws to enrich themselves by beggaring the middle and lower classes.

The result is more rich people and fewer middle class. For the rich, this is not a problem.

If we want to have a public discussion about inequality, the first thing we have to do is define which sorts of inequality meet the definition of a “problem.” We then need to decide which of these problems should be solved. Not every problem qualifies.

The history of public policy is littered with “solutions” that turned out to be worse than the problem they were supposedly solving -- the political equivalent of the proverbial fool who blows his own head off to cure his headache.

Remember, McArdle said that people don't need health insurance because the doctor might kill you by mistake. If you try to reverse income inequality, you'll kill the economy!

These steps are quite obvious, and yet quite often forgotten. Some eye-popping figure about inequality is cited; anecdotes are sprinkled hither and thither; some dire predictions are made; and the whole thing closes with a moral exhortation to do something.

McArdle thinks nobody should do anything ever, such as regulate to raise wages or lower taxes. However, if the government wants to bail out banks, well, that's regrettable but absolutely necessary or the economy will die. Now that Bloomberg wants to discuss inequality, McArdle is forced to address the distasteful subject instead of worshipping hedge fund managers or praising Goldman's  Sachs, or covertly and mendaciously supporting the Koch Agenda.

We’ll begin by excluding the “sad facts”: the large swathes of inequality that the government probably won’t attempt to solve, because the possible solutions would be politically impossible or morally abhorrent. The government isn’t going to find you friends, nor can it get you a loving spouse or a better singing voice. On the other hand, the government is pretty good at moving money around, so we tend to spend a lot of time talking about income inequality.

No doubt we will discover with McArdle's help that income inequality can be created but it cannot be eliminated for reasons.

Yet even income inequality turns out to be surprisingly ill-defined. It is a melting pot into which we throw wealth inequality, wage inequality, inequality of opportunity, inequality of political power, and often rigidity of socioeconomic class. Frequently, we also toss in the absolute, rather than relative, difficulties of a life in poverty. Yet no matter how hard we stir, these things cannot all be made into a single issue called “inequality.” They do not arise from the same sources, nor would they be eliminated by the same solutions. Fixing one will not necessarily fix another, and there is no comprehensive solution that will fix them all.

You see, American, the government can't just flip a switch and make everything unfair so it should do nothing. Likewise, putting a man on the moon is more than just putting fuel in a tin can so we can never have a space program.

So which ones should we try to fix, and how?

I would cross income inequality itself off the list of priorities. Far greater concerns include: absolute suffering among those with low incomes; a socioeconomic structure that seems to be ossifying into a hierarchy of professional classes; and a decline in income mobility, which is to say, in equality of opportunity. It doesn’t really matter whether Bill Gates has some incomprehensible sum of money at his disposal. It does matter a great deal whether there are Americans in desperate want. And of course, it matters whether anyone with the aptitude and motivation can become the next Bill Gates, or only a handful of privileged people who are already well off.

So we will attack this grave problem of income inequality by denying it even exists. We must address the suffering of the poor without helping them become less poor. We must accept an end to the American dream of economic and social advancement because people can't afford to educate themselves into the professional class. It doesn't matter how much money the rich have. The only thing that matters is how little the poor have.

The poor tend to kill the rich when they have too little and Megan is rich. We can't have the poor fighting back, can we? No, what matters is that people who have aptitude and motivation can advance.

People like Megan McArdle, who said she stared dreamily out of the window during her grossly expensive Ivy League education and had a rotten GPA. McArdle also said she wasn't motivated to find work when Wall Street told her thanks very much but you're a loser who doesn't have enough brains or clout to make a dime for the firm.

In this meritocracy that we live in, McArdle is living proof of the benefit of personal superiority, the only way to advance in our appropriately inequal world.

To repeat: Mrs. Megan McArdle says we don't need to worry about income inequality become some people are just better than others and that is why they become rich and everyone else doesn't.

Aptitude.

Motivation.

That's all it takes.

Excuse me, I have to go outside and scream now.

Okay. I'm back.

I also submit that the importance of the issue is inversely proportionate to the ease of solution. The government is very good at taxing income of some Americans and writing checks to others. (Whether you think it should do this is, of course, a different question.) It is very bad at preparing someone to live a solid and fulfilling life of work and community, which is one reason we mostly leave that job to parents.

Please remember that McArdle is just parroting what she hears; she has few thoughts of her own. This is what your betters say about you as you take the bus to your under--paid jobs. You're inferior. Can't be help, it's just the way it is, like it can't be helped that Black people are (maybe!) stupider than White people and that's why Blacks make less money.

Government is also not well suited to creating a lot of satisfying and remunerative jobs. It can contribute to productivity and help companies to flourish, for example through basic research and by maintaining a competent legal and regulatory system. And it can directly create a few jobs providing government services; these have been, for many communities at many times, a stepping stone to the middle class.

The government can spend money if it will help the rich but not the poor. They don't deserve it anyway, do they?

So their taxes can be used to do drug research so Pharma can make higher profits for people rich enough to own drug companies and drug stock. The government can write laws that separate productivity from wages to further enrich the rich. It can write and enforce laws to protect the rich's property. It can enforce only regulations that keep the rich alive and healthy. But doing anything to benefit the poor will destroy the country.

But there are limits to how many jobs the government can create without choking off the productive economy that funds the government (not least, the current financial limits imposed by state budgets already deeply overstrained by financial promises made to previous generations of workers). For the most part, the best the government can do is to avoid stepping on the creation of satisfying and remunerative jobs; no nation on earth seems to have figured out how to generate “good jobs” for everyone.

And if we can't find a high-paying job for everyone we should help no one.

All this means is that there is no silver bullet for the government to guarantee full employment and solve structural inequality. Government can do something -- but it remains to be seen exactly what, and how much.

Over the coming months, my colleagues and I at Bloomberg View, along with outside contributors and readers, will be exploring how government adds to inequality, and what government could do to reduce it. We’re not crazy enough to think that we’re going to solve all of America’s problems. But we may be able to identify some that are solvable, and avoid some “cures” that would be counterproductive.

Lucky us. Months and months of McArdle explaining patiently that nobody can do anything ever, unless it helps the rich. I can't wait.